All consortium lenders excluding ICICI Bank assign Debt to NARCL in Jaypee Infra Insolvency Proceedings

All consortium lenders excluding ICICI Bank assign Debt to NARCL in Jaypee Infra Insolvency Proceedings

Jaypee Infratech Ltd (JIL) is currently undergoing Corporate Insolvency Resolution (CIRP) under the provisions of the Insolvency and Bankruptcy Code, 2016 (IBC) after an order was passed by the Allahabad-Bench of National Company Law Tribunal (NCLT) on August 9, 2017.

It was reported that all the all the consortium lenders except ICICI Bank have assigned their debt to National Asset Reconstruction Company Ltd (in short NARCL).

The case has been reserved for orders on the approval of the resolution plan in respect of JIL before the NCLT, Principal Bench, Delhi.

JIL in a regulatory filing stated that the company has been financed by a consortium of lenders consisting of IDBI Bank Ltd, India Infrastructure Finance Company Ltd, Union Bank of India, Life Insurance Corporation of India, State Bank of India, Canara Bank, Bank of Maharashtra, IFCI Ltd, J&K Bank Ltd and ICICI Bank forming part of the Committee of Creditors (in short CoC).

In the filing, JIL stated, "IDBI Bank Ltd acting as lenders' agent of the said Consortium, vide its letter dated 21 January, 2023, has intimated JIL through its Interim Resolution Professional (in short IRP) that all the consortium lenders, excluding ICICI Bank, have assigned their debts to National Asset Reconstruction Company Ltd (NARCL) vide assignment deed dated 20 January, 2023."

A claim of Rs 9,783 crore was submitted by JIL's lenders and CIRP was initiated over an application moved by an IDBI Bank-led consortium. It was among the first list of 12 companies against whom, the Reserve Bank of India (in short RBI) had directed the banks to approach the NCLT to get insolvency proceedings initiated.

In November 2022, the NCLT reserved its order on Mumbai-based Suraksha group's bid to acquire the JIL and complete around 20,000 flats for distressed homebuyers.

In June 2021 Suraksha group had received the approval of financial creditors and homebuyers to take over the JIL, raising expectations for homebuyers of getting possession of their dream flats installed projects, mainly in Noida and Greater Noida.

In the first round of insolvency proceedings, lenders rejected the Rs 7,350-crore bid of Lakshadweep, part of the Suraksha group. The CoC had rejected the bids of Suraksha and NBCC in the second round held in May-June 2019.

In November 2019, the Supreme Court directed that the revised bids be invited only from NBCC and Suraksha.

Subsequently in December 2019, the CoC approved the resolution plan of NBCC with a 97.36 per cent vote in favor during the third round of the bidding process. In March 2020, NBCC got approval from the NCLT to acquire JIL.

However, the order was challenged before the NCLAT and later in the Supreme Court.

The Apex Court on 24 March, 2021, ordered for a fresh round of bidding between the NBCC and the Suraksha group only.