Suraksha Emerges as the Highest Bidder for Jaypee Infratech

Suraksha Asset Reconstruction Co. has emerged as the leading bidder for bankrupt construction firm Jaypee Infratech Ltd. in the ongoing fourth round of bidding. In the previous round, NBCC (India) Ltd. had been declared as the winning bidder but the process was restar

BY Realty Plus
Published - Friday, 21 May, 2021

Suraksha Emerges as the Highest Bidder for Jaypee Infratech

Suraksha Asset Reconstruction Co. has emerged as the leading bidder for bankrupt construction firm Jaypee Infratech Ltd. in the ongoing fourth round of bidding. In the previous round, NBCC (India) Ltd. had been declared as the winning bidder but the process was restarted following directions from the Supreme Court. At a meeting on May 15, the resolution professional for Jaypee Infratech informed As part of its plan, Suraksha ARC plans a Rs 125 crore worth fund infusion into Jaypee Infratech to restart operations. The ARC will avail Rs 3,000 crore in loans to be used for completing pending housing projects. The ARC will also have access to Rs 300 crore which Jaiprakash Associates owes. Another Rs 750 crore is due to be received from toll road collections from the Yamuna Expressway, which Jaypee Infratech is managing. Suraksha ARC estimates that Rs 4,300 crore in working capital will be needed to complete pending projects. The bidder aims to complete construction of the flats in 42 months, where the delivery schedule will kick in 90 days after Suraksha ARC has taken over Jaypee Infratech. It will set aside land parcels worth Rs 400 crore in a trust which will be used to pay any penalty due to homebuyers for delayed deliveries. For future delays beyond 12 months from promised date of delivery, the company has proposed a penalty rate of Rs 5 per square foot, per month. For homebuyers seeking a refund, Suraksha ARC has promised to pay Rs 65 crore in two installments. For banks and other lenders, Suraksha ARC is offering land parcels worth Rs 7,116 crore in a debt-land swap deal. The bidder will also act as an agency for monetising these land parcels for a fixed fee of Rs 25 crore. NBCC has offered to infuse Rs 10 crore through equity or debt into Jaypee Infratech. The bidder has offered 100% shareholding in the land bank special purpose vehicle to financial creditors. It will also transfer 85% shareholding in special purpose vehicle holding the Yamuna Expressway to these creditors. NBCC's plan envisages raising Rs 2,000 crore through securitising the toll receipts of Yamuna Expressway. The structure would allow infusion of Rs 2,000 crore into Jaypee Infratech, though the plan does not specify whether these funds would be used for construction of the flats, a person with direct knowledge said. The plan would score higher, if NBCC clarified that this money would be used for construction. For homebuyers, NBCC has promised to offer Rs 5 per square feet of delay penalty, if the delivery of flats is delayed beyond 12 months from the promised date of delivery. For refund seeking homebuyers, NBCC will pay Rs 62.4 crore spread over four years. For any refund seekers who now want delivery of homes instead, NBCC has provided a 90-day window from the date of approval of its plan.