Jaypee Infratech Home buyers are planning to end EMIs.

By Abhay Harish Shah, Realty Quarter

No signs of the public sector enterprise can be seen getting through, even after the process of voting on the NBCC’s bid for Jaypee Infratech (JIL) has been completed on Monday. According to the sources, homebuyers have planned to stop paying the current EMIs (equated monthly installment) because many of them have ‘lost expectations of the resolution.’

On May 31st, the online vote of the NBCC began. In order to achieve the split and obtain the insolvent realty business, it would take 66% votes in favour. The homebuyers who are mostly in favour of the offer have approximately 58% of the voting share, but only 9,000 have voted of the total 22,000 homebuyers to date, further weakening the bid for the NBCC.

IDBI Bank, JIL’s main lender, which has a stake of approximately 18%, is already against a “contingent” offer under the settlement scheme.

IANS was informed by a member of the home buyers association, “We tell people (the home buyer) that we should end our EMIs. And it is going to be out next step.” Out of 22,000 homebuyers, almost 70% of them have taken the loan, he concluded.

JIL began insolvency process in 2017 after IDBI Bank-led consortium’s request for a resolution of the company had been admitted by the National Company Law Tribunal (NCLT).

At the first round of insolvency proceedings, a bid of R. 7,350 crore of Lakshdeep (part of Suraksha Group) was rejected by lenders.

Anuj Jain began the second round of bidding in October 2018, an interim resolution professional (IRP). In May this year, the Committee of Creditors (CoC) refused a Suraksha Realty bid by way of a voting procedure after which the CoC chose to take the offer of NBCC into account.

Finally, the CoC agreed that the amended NBCC bid would be brought to the ballot. While homebuyers favoured the voting procedure, IDBI lenders disagreed because the bid was viewed as binding.

The NBCC bid seeks to cancel an estimated income tax liability of Rs.33,000 crore due over 30 years period in accordance with the Concession Agreement to transfer land to Jaypee Infratech Limited (JIL) from the Yamuna Expressway Industrial Development Authority (YEIDA). The PSU also sought relief from taking consent of the YEIDA for any business transfer between JIL and Yamuna Expressway SPV for transfer of assets as well as land parcels from JIL to the land bank “special purpose vehicle” (SPV).

In order to explain the circumstances and to seek their detachment from the scheme, the CoC requested a state building major. Including decreasing the volume of inventories it intends to send out to lenders, NBCC produced a number of minor amendments to its bid but failed to remove controversial provisions concerning income tax responsibility and accepted the authorization of YEIDA for transfers between YEIDA and JIL.

In the wake of the offer, the CoC ultimately approached the National Company Law Appellate Tribunal (NCLAT) after putting the bid on vote starting May 30. It asked for permission to reject the bid, which will be heard by Delhi-based appellate tribunal on Monday.

At present, it appears unlikely that the NBCC offer will be completed and no relief for more than 20,000 stranded home buyers seems to come quickly.