JAL's bid for Jaypee Infra junked, Valia group in fray

The fate of the new bidder for Jaypee Infratech will be decided over the next two days after lenders of the company, which is facing bankruptcy proceedings, on Monday opted to treat the Valia group as the preferred bidder. The lenders rejected an offer from Jaiprakash Associates Ltd(JAL) that entailed no ‘haircut’ for banks led by IDBI Bank.

Committee of creditors, which had a daylong meeting, decided to allow voting on the Valia group’s bid from Tuesday afternoon, with lenders allowed to submit their preference until Wednesday. IIFCL pitched for an increase in the offer of around Rs 7,400 crore, but the Valia group refused to revise it and also said it was unwilling to share any upside with lenders in future.

The bidders went ahead with Valia group as JAL is ineligible to submit an offer under the Insolvency & Bankruptcy Code but made a presentation based on the Supreme Court’s order.

Sources said JAL’s offer was better than the Valia group’s — it suggested it will bear the burden to compensate homebuyers under Rera, clear dues to the Yamuna Expressway Industrial Development Authority and meet the higher compensation dues to farmers. But it also proposed to extend the completion deadline for the flats, many of which were booked a decade ago, by another year to 2022. According to the revised schedule, all flats are to be handed over by March 2021. JAL is the majority shareholder in Jaypee Infratech. The offer entailed an upfront payment of Rs 1,255 crore, loan swap of Rs 4,750 crore involving 1,437 acre (compared to Valia group’s 1,320 acre), optionally convertible debentures of Rs 2,125 crore at a yield of 9% as well as preference shares of Rs 1,200 crore with a yield of 0.1%. If also offered to clear dues of Rs 130 crore to fixed deposit holders.

The upfront payment that JAL proposed included the Rs 750 crore that is to be deposited as part of Supreme Court’s instructions with the remaining Rs 500 crore to come from the company’s cash accruals. Sources said it had also offered to sell some assets such as Bhilai Cement and raise Rs 500-600 crore. Another Rs 2,700 crore was proposed to be raised through monetisation of Taj Expressway’s toll revenue for 12 years with a credit facility of Rs 1,000 crore also planned.