SC asks Jaiprakash to focus on repaying homebuyers, seeks new bid for arm Jaypee Infra
The Supreme Court today threw a spanner in the attempt of Jaiprakash Associates and its promoters to retain control of its subsidiary Jaypee Infratech. It did two things in that direction.
First, the apex court asked the group to deposit Rs 1,250 crore more by June 15 to ensure a sufficient cash pool for homebuyers seeking refund. It then also gave more time to seek fresh bids for the company that saw three bidders in race to buy it with no eventual winner.
The 270-day deadline to find a solution to the company’s debt problems lapsed on May 12. As per the Insolvency and Bankruptcy Code, a company has to be sent for liquidation if no solution is found within that time but not so in this case. The SC has also ruled out liquidation of the company since that would harm the interest of the homebuyers.
The group has so far deposited Rs 750 crore and with a Rs 10,000-crore offer to its lenders last week, it had hoped to keep the company under its fold. That possibility dimmed a little today.
The apex court said the interest of homebuyers will be fully protected even if that meant overriding the Insolvency and Bankruptcy Code which keeps the interest of secured lenders above all. Homebuyers, being unsecured creditors, are therefore left exposed as secured creditors have the first right to the assets of the company. There are some 18,000-19,000 homebuyers awaiting the delivery of their flats for seven-to-eight years.
There were three bidders in race to buy Jaypee Infratech — Lakshadweep, the Adani group and Kotak Realty Fund-Cube Highways.