Details of approved resolution plan for Jaypee Infratech
The corporate insolvency resolution process of Jaypee Infratech saw its closure (six years after the process started in August 2017) with the NCLT approval of the resolution plan submitted by Suraksha Realty and Lakshdeep Investments and Finance Private Limited.
Here are the details of Resolution Plan as approved by the NCLT.
Pre and Post net-worth of the Company
The net-worth of Jaypee Infratech as on close of 31 March 2017 before initiation of CIRP (on 09 August 2017) was Rs 5343 crore. The net-worth of the Company as on 31 December 2022 was Rs 7325 crore. The post CIRP net-worth of the Company will be available post implementation of the Resolution Plan from the appointed date.
Details of the Assets of the Company Post CIRP
All movable and immovable fixed assets and tangible inventories such as stocks and spares of the Corporate Debtor (Jaypee Infratech) will be reconciled, identified and provided for in the custody of the Corporate Debtor or Resolution Applicants, free of any encumbrances except as provided in the Resolution Plan.
The Resolution Applicants/Corporate Debtor will retain the right to revalue/impair/provide for the assets of the Corporate Debtor to the satisfaction of Resolution Applicants before Resolution Applicants make infusion in the Corporate Debtor, for any reason including to ensure that assets are not be carried in excess of amounts expected to be realised from their sale for use.
Details of securities continuing to be imposed on the Company’s assets
The existing security interest of Institutional Financial Creditors, are as under:
A. Axis Bank, having exclusive charge over by way of Mortgage over 124.73 acres land parcel spread in Village Kripalpur (82.58 acres) and Tappal (42.16 acres) at District Aligarh, U.P
B. SREI Equipment Finance Limited (SREI), having exclusive charge by way of Mortgage over 27 acres of land at Village Tappal, Tehsil Khair, District Aligarh, U.P. and 13.79 acres of land at Village Tappal, Tehsil Khair, District Aligarh, UP; and
C. Consortium of IDBI Bank Ltd, IIFCL, LIC, Corporation Bank, State Bank of India, Syndicate Bank, Bank of Maharashtra, ICICI Bank, Union Bank, IFCI and J&K Bank, having pari-passu charge, are as under:
a) first pari passu charge by way of mortgage of land acquired for constructing the Yamuna Expressway covering approximately length of 41km along with first pari passu charge by way of assignment of all the rights, title, interest, benefits, claims and demands whatsoever of JIL in the Concession Agreement save and except in relation to portion of land which is developed/ undeveloped and alienated by JIL from time to time pursuant to sale agreement and project documents duly acknowledged and consented to by the relevant counterparties to such project documents, as amended, varied or supplemented from time to time, statutory/non statutory clearances and approvals obtained/to be obtained for the project; letter of credit, guarantee, performance bond etc, provided by any party for the project; insurance contract/insurance proceeds pertaining to the project (other than those in respect of discharge of third party liability) and all benefits incidental to project activities,
b) first pari passu charge by the way of hypothecation of all the movables of Corporate Debtor, present and future excluding movables which are forming part of the common infrastructural facilities of Real estate development.
c) first pari passu charge on Corporate Debtor’s book debts, receivables, on all bank accounts including but not limited to the Debt Recovery Service Account (DSRA), the Trust and the Retention Account (TRA), where all the cash inflows from the toll collection and sale proceeds of the real estate shall be deposited and all the proceeds therein, commissions, revenues of whatsoever nature and whenever arising, intangibles including but not limited to goodwill, rights, undertaking and uncalled capital, both present and future,
d) first pari passu charge by the way of mortgage of part of land (~1903.40 acres) in Jaganpur, Mirzapur, Agra and Tappal acquired for real estate development.
All the Consortium lenders excluding ICICI Bank have assigned their debts to National Asset Reconstruction Company Limited (‘NARCL’), Mumbai vide Assignment Deed dated January 20, 2023.
Other Material Liabilities imposed on the company
There are no material liabilities imposed on the company under NCLT order approving the resolution plan.
| Shareholders | Value of shares (Before Resolution) (Rs cr) | % Shareholding (Before resolution) | Value of shares (after resolution) (Rs cr) | %shareholding (after resolution) |
| Existing promoters | 847 | 60.98 | 0 | 0 |
| New Promoters | 0 | 0 | 125 | 100 |
| Public | 541.9 | 39.2 | 0 | 0 |
| Total | 1388.9 | 100 | 125 | 100 |
Details of funds infused in the Company, creditors paid-off
| Particulars | Sources of Fund | Amount (Rs cr) |
| Upfront Equity Infusion by Resolution Applicants within 90 days of the Approval Date in the Corporate Debtor to be utilised as and when required, on need basis for completion of the Projects. | Networth of the Resolution Applicants along with networth of promoters of Resolution Applicants and their related entities of Rs. 6,537 crore as mentioned in the Resolution Plan. | 125 |
| Debt and/or any other instrument from the Resolution Applicants and/or their related entities to the Corporate Debtor, in 90 days of the Approval Date to be utilised as and when required, on need basis for completion of the Projects. | Networth of the Resolution Applicants along with networth of promoters of Resolution Applicants and their related entities of Rs. 6,537 crore as mentioned in the Resolution Plan. | 125 |
| Redemption of Zero Coupon Non-Convertible Debentures to be issued in accordance with thisResolution Plan and / or Guaranteed Payment Obligation of Rs. 1,280 crore, to theAssenting Institutional Financial Creditors (Assenting NCDs). | Internal Accruals of the Company and / or additional fund infusion by Resolution Applicants by way of equity, debt or any other instrument, as it deemed fit. | 1,280 |
| Land for Institutional Financial Creditors, as per the terms of this Resolution Plan at FMV. | — | 6,457 |
| Loan (Credit Facility) of Rs. 3000 crore to be arranged by Resolution Applicants within 90 days of the Approval Date, to be utilised as and when required, on need basis for completion of the Projects. | Expression of Interest received from SWAMIH fund for stressed assets of Government of India and / or facility from Standard Chartered Bank Group (Letter of Support annexed) and/or any other banks or entities and / or Net worth of the Resolution Applicants along with net worth of promoters of Resolution Applicants and their related entities as mentioned in the Resolution Plan. | 3,000 |
| Bank balance available with the Corporate Debtor excluding funds earmarked for MBCB safety barriers. | — | 111 |
| Estimated Receivables from Jaiprakash Associates Limited subject to reconciliation under the aegis of NCLT in terms of Jaypee Keningston Judgment* | 300 | |
| Estimated net operating cash flows from the Yamuna Expressway of first three years towards construction and/or refund and/or regular operating expenses of the Corporate Debtor and/or servicing of interest on Credit Facility obtained for construction for home buyers. | 750 | |
| Total | 12,148 |
* The amount mentioned herein is indicative in nature and may change. The amounts appearing in sr. no. 1 to 3 and 6 of the above table are hereinafter collectively referred to as an “Applicants’ Contribution”.
| Application of funds | Amount (Rs cr) |
| Payment towards Insolvency Resolution Process Costs on actual basis (“IRP Cost”)* | 5.45 |
| Upfront Payment to the Operational Creditors in terms of this Resolution Plan | 0.40 |
| Payment to the workmen & employees | — |
| Redemption of Zero Coupon Assenting NCDs issued and / or Guaranteed Payment Obligation of Rs. 1,280 crore, to Assenting Institutional Financial Creditors. | 1,280 |
| Land for Institutional Financial Creditors, as per the terms of this Resolution Plan | 6,457 |
| Payment to FD Holders | 38.42 |
| Funds for construction of real estate projects for delivery of homes to Homebuyers and/or refund to homebuyers to be utilised in line with the business plan for construction*, in accordance with the Resolution Plan | 4,300 |
| Payment to Public Shareholders | 0.14 |
| Provision for expenses for managing and monetisation of land for Assenting Institutional Financial Creditors | 25 |
| Provision for initial operating expenses of the Corporate Debtor and other contingencies including additional CIRP expenses | 41.59 |
| Total | 12,148 |
* The total amount of the Insolvency Resolution Process Costs, Funds for Home Buyers, workers dues, and further provisions for expenses are indicative in nature and may change
Additional liability on incoming investors due to the transaction, source of such funding etc.
There is no additional liability on the incoming investors due to the transaction except as mentioned in the Resolution Plan.
Impact on the investor
The equity Shares of the Jaypee Infratech are proposed to be delisted and amount payable to the public shareholders is provided for in the Resolution Plan as given below:
Existing Public shareholders shall be given an aggregate exit at a price of Rs. 0.14 crore which is not less than the liquidation value, in the opinion of the Resolution Applicants, as determined under regulation 35 of the Regulations, after paying off dues in the order of priority as defined under section 53 of the Code. No amount shall be paid to the Promoter Shareholders.
Upon approval of the Resolution plan by NCLT, the issued, subscribed and paid up share capital of the corporate Debtor including preference shares if any, shall be cancelled and reduced in its entirety, without requiring any further act, instrument or deed, such that on effecting the said reduction, the entire share capital of Jaypee Infratech held by the shareholders of the Corporate Debtor shall be deemed to have been cancelled immediately on effectiveness of such cancellation and reduction as above, the issued, subscribed and paid-up share capital of the Corporate Debtor shall stand reduced to NIL.
The revised projected financials and P/E, RONW, ratios etc. are not known at the moment.
Strategy of the Resolution Applicant to ramp up operations of Jaypee Infratech:
The Resolution Applicants undertake to implement the Resolution Plan as under:
a) pay the Insolvency Resolution Process Cost as per the Code and Regulations;
b) pay the amounts, as mentioned under the Resolution Plan, to the Operational Creditors in priority to the payments to the Financial Creditors;
c) allow enforcement of security interest in line with Jaypee Kengsinton Judgement, as mentioned under the Resolution Plan, to the Institutional Financial Creditors that have opted to not vote in favour of the Resolution Plan, in priority to the payments to the Assenting Institutional Financial Creditors;
d) arrange for Rs. 3,000 crore facility for the purpose of completion of the Real Estate Projects of the Corporate Debtor within 90 days of the Approval Date.
e) The period of implementation of the Resolution Plan for Assenting Institutional Financial Creditors shall be satisfied when the transfer of the beneficial ownership of Assenting Land Parcels and Assenting Surplus Lands for the Assenting Institutional Financial Creditors and issuance of Assenting NCDs, as per the Resolution Plan, are completed.
The Resolution Applicant shall complete the same within 6 months or any other mutually extendable date
The details as to the delisting plans, if any approved in the resolution plan.
The Corporate Debtor shall take the steps for delisting of its Equity Shares in accordance with the provisions of the Securities and Exchange Board of India (Delisting of Equity Shares) Regulations, 2009, as amended from time to time, read with the Securities and Exchange Board of India (Delisting of Equity Shares) (Amendment) Regulations, 2018 issued by the SEBI on July 29, 2019, as amended from time to time:
a) The cancellation of shares, capital reduction and delisting shall be applicable to erstwhile shareholders of Corporate Debtor;
b) shall be pursuant to the Approval Date and shall not require any other procedure as required under the Companies Act, including that under Section 66 of the Companies Act or regulations of the SEBI and under SCRA and SCRR; and
c) shall not require the consent of any of the creditors of Jaypee Infratech or approval of the shareholders of Corporate Debtor as the Resolution Plan upon being approved by the NCLT shall be binding on Corporate Debtor and its stakeholders (including its creditors and shareholders’).”
Public Existing shareholders shall be given an aggregate exit at a price of Rs. 0.14 crore which is not less than the liquidation value, in the opinion of the Resolution Applicants, as determined under regulation 35 of the Regulations, after paying off dues in the order of priority as defined under section 53 of the Code and no amount shall be paid to the Promoter Shareholders.
The Corporate Debtor shall thereafter intimate and disclose delisting of such shares along with the justification for exit price in respect of delisting proposed to the recognized stock exchanges within one day of Resolution Plan being approved under section 31 of the Code.
Details of the new promoters
Suraksha Realty Limited: A company registered under the provisions of the Companies Act, 1956 and having Corporate Identity Number U45201MH2008PLC180675, having its registered office at 3, Narayan Building, 23, L. N. Road, Dadar (East), Mumbai, Maharashtra – 400014.
Lakshdeep Investments and Finance Private Limited: A company registered under the provisions of the Companies Act, 1956 and having Corporate Identity Number U67120MH1993PTC072685, having its registered office at 3, Narayan Building, 23, L. N. Road, Dadar (East), Mumbai, Maharashtra – 400014.
Also Read: Significance of Jaypee Infratech insolvency resolution process
