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Jaypee Infratech lenders reject Rs7,350cr bid by Lakswadeep; Stock hits lower circuit

The lenders of Jaypee Infratech Ltd (JIL) have rejected the Rs7,350cr bid made by Lakshwadeep, the highest bidder for the company as they found it inadequate.

The lenders of Jaypee Infratech Ltd (JIL) have rejected the Rs7,350cr bid made by Lakshwadeep, the highest bidder for the company as they found it inadequate.

In a filing to the stock exchanges today, JIL said that the resolution plan submitted by Lakshwadeep Investments and Finance Pvt Ltd and others was rejected as less than 75% of the lenders voted in favor of the bid. The resolution plan was considered by the committee of creditors (CoC) in its meeting held on May 07, 2018, and put to e-voting on 8th and 9th of May 2018.

JIL further added that the corporate insolvency resolution period of JIL expires on May 12, 2018. Hence, an appropriate application under the provisions of the Code will be filed by the resolution professional with the National Company Law Tribunal (NCLT) Allahabad bench for further direction as the Hon`ble Supreme Court deems fit. The Supreme Court meets on May 11 before it breaks for a two-month-long vacation.

More than half a dozen members of Jaypee Infra’s committee of creditors (CoC), who together have 40% share in its outstanding debt, have raised serious concerns over the valuation of assets and repayment structure proposed by Lakshwadeep. According to a note prepared by IDBI Bank, Jaypee Infra’s largest lender, the company’s actual value stands at Rs17,111cr, while its distress value is pegged at Rs14,548cr. Lakshadweep’s Rs7,000cr bid pegs Jaypee Infra’s value at less than half of IDBI’s distress scenario number.

Media reports suggested that lenders did not consider a Rs10,000cr offer made by promoters of Jaypee Group for paying off debt and completing the unfinished housing project as the provisions of the bankruptcy and insolvency law, under which Jaypee Group is being auctioned, restrict defaulting promoters from bidding.

Earlier this week, media reports said that JIL’s promoter group’s Manoj Gaur submitted a revised bid of Rs10,000cr to creditors in bid to revive the debt-laden company. The Jaypee offer included a mix of upfront payment of Rs 1,255 crore, swap of land in Noida against bulk of its Rs9,000cr debt, and sale of assets.

Debt-ridden Jaypee Infratech has an outstanding debt of nearly Rs9800cr, of which its owes Rs4,334cr pertains to IDBI. The other lenders include IIFCL, LIC, SBI, Corporation Bank, Syndicate Bank, Bank Of Maharashtra, ICICI Bank, Union Bank, IFCI, J&K Bank, Axis Bank and Srei Equipment Finance Ltd.

Jaypee Infratech Ltd is currently trading at Rs5.90 down by Rs0.31 or 4.99% from its previous closing of Rs6.21 on the BSE.

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