June 10, 2019

NCLAT Allows Lenders To Vote Against NBCC’s Bid To Acquire Jaypee Infratech Ltd; Directs Completion Of Voting Process

[ By Bobby Anthony ]


Lenders to the Government of India owned NBCC (India) Limited, have been allowed to vote against its proposal to acquire debt-ridden Jaypee Infratech Limited, the National Company Law Appellate Tribunal (NCLAT) has stated.

The NCLAT was hearing a batch of applications filed by banks seeking permission to vote against the NBCC proposal.

Earlier, a consortium of lenders (Committee of Creditors) led by IDBI Bank, had sought NCLAT’s permission to vote against NBCC’s bid to acquire Jaypee Infratech Ltd.

Incidentally, the voting process began on May 31 and ended on June 10. As many as 13 banks and 23,000 homebuyers have voting rights.

The NCLAT clarified that while declaring the results, votes of absentees would not be counted in the total voting percentage.

IDBI Bank, which is part of the consortium of lenders (creditors), has been against NBCC's resolution plan on the grounds of its bid being conditional.

The NBCC's bid seeks the cancellation of an estimated income tax liability of Rs 33,000 crore due over a period of 30 years under the concession agreement for the transfer of land from the Yamuna Expressway Industrial Development Authority to Jaypee Infratech Limited.

The NBCC had also sought relief from taking consent of the YEIDA for any business transfer between Jaypee Infratech Limited and the Yamuna Expressway special purpose vehicle for transfer of assets as well as land parcels from Jaypee Infratech Limited to the land bank (special purpose vehicle).

The Committee of Creditors (lenders) had asked the NBCC to clarify about conditions and also sought their removal from the plan.

However, the NBCC made some minor changes to its bid, including reducing the quantity of unsold inventory it plans to give to the lenders, but did not do away with the contentious clauses related to income tax liability as well as taking approval of Yamuna Expressway Industrial Development Authority for any business transfer between Yamuna Expressway Industrial Development Authority and Jaypee Infratech Limited.

Following this, although the lenders put the bid to vote, IDBI Bank had approached the NCLAT seeking permission to reject the bid.

Related Post

latest News

  • Ministry of Corporate Affairs Set To Seek Court Order to Freeze Bank Accounts, Properties of Former IL&FS Directors

    The Ministry of Corporate Affairs (MCA) plans to move court to freeze bank accounts and properties of past IL&FS group directors as well as move the N...

    Read More
  • CCI appoints Pramod Kumar Singh as its Secretary

    On January 1, 2019, the Competition Commission of India (CCI) appointed Shri Pramod Kumar Singh as its Secretary.

    Read More
  • Puma, Forever 21 file stipulation of dismissal at US District Court

    On November 7, Puma (a German multinational company which is the third largest sportswear manufacturer in the world) and Forever 21 (an American fast ...

    Read More