Thursday, June 24, 2021
Home Economy and Finance Insolvency and Bankruptcy Code Impact : Another Industrialist finds the money to clear dues

Insolvency and Bankruptcy Code Impact : Another Industrialist finds the money to clear dues

The promoters of the company have suggested that they will settle the dues of lenders.

The promoters of stressed realty developer Jaypee Infratech has come out with another proposal to save its cash-strapped company from resolution process under the Insolvency and Bankruptcy Code. The proposal has come under section 12A of IBC, while state-owned NBCC and realty firm Suraksha group are already putting bids to acquire the company. The promoters of the company have suggested that they will settle the dues of lenders.

Insolvency and Bankruptcy code has been proving itself a boon by saving defaulting firms turn into NPAs. Jaypee Infratech was dragged to National Company Law Tribunal by Industrial Development Bank of India, to which the debt-ridden company owes ₹4,334 crore. It is one the most-closely watched insolvency proceedings, as it also involves 32,000 housebuyers of Noida and Greater Noida, who have been slid into a state of limbo after the company defaulted.

NCLT had appointed Anuj Jain as insolvency resolution professional or IRP, to overlook bids coming for the company. In May last year, the lenders rejected Lakshadweep, which is part of the Suraksha Group, bid of ₹7,350 crore to acquire the firm, as it was felt to be rather lower than the firm’s net worth and assets. Then, in October 2018, IRP Anuj Jain started a fresh initiative to invite bids for the company. Hence, this is the second round by IRP and lenders to conclude the insolvency process.

In April last year, Jaypee Infratech had made an offer of ₹10,000 crore to lenders, which was promptly rejected, as section 29A bars defaulting promoters and connected parties from bidding for their asset. The section is considered contentious by promoters of many firms, but it was upheld by Supreme court in January this year.

This time, the debt-ridden realty firm has made an offer, in accordance with section 12A, which allows the company to withdraw the insolvency case if 90% of lenders agree. The proposal was presented before the committee of creditors on Monday.

The proposal put forth by Jaypee Infratech seems unlikely to be accepted by lenders and homebuyers as the NBCC and Suraksha group have already made their financial bids.

Armed with IBC, the government has motivated numerous companies to hurry up and clear their dues. In May last year, it was reported that fearing government crackdown, 2100 companies had rushed to clear their dues to the tune of ₹83,000 crores.

During the speech of Union Budget 2019, interim finance minister Piyush Goyal had stated that through IBC, the government has managed to recover ₹3 lakh crore worth NPAs or bad loans. It also prevented many defaulting firms from turning into stressed assets.

  Support Us  

Whether NDTV or 'The Wire', they never have to worry about funds. In name of saving democracy, they get money from various sources. We need your support to fight them. Please contribute whatever you can afford

OpIndia Staff
Staff reporter at OpIndia

Related Articles

Trending now

From cover up to conspiracy to murder: Some unanswered questions about Dr Syama Prasad Mookerjee’s death in Kashmir

Dr Syama Prasad Mookerjee had died mysteriously days after he was arrested in Jammu and Kashmir for entering the state without permission

Former IFS officer Lakshmi M Puri sends legal notice to Congress supporter Saket Gokhale for misleading allegations against her

Alleged activist and Congress mouthpiece Saket Gokhale made baseless allegations against Lakshmi M Puri, wife of Hardeep Singh Puri

Ever Given: Ship that blocked Suez Canal has since been held by Canal authorities, they wanted 916 million dollars

After demanding 916 USD initially, the canal authorities had later lowered the demand amount to 550 million. A final settlement is expected to be reached soon.

Trinamool MP Mimi Chakraborty duped by fake IAS officer’s fake vaccination drive, one arrested

Mimi Chakraborty was reportedly duped by a man who claimed to be an IAS officer and requested the TMC MP to be chief guest at a COVID-19 vaccination drive organised by him.

Telangana: Woman working at Christian priest’s home dies in police custody, officer suspended

Mariyamma, who used to work as a domestic help at local priest Father Balaswamy's house in Govindapuram village, breathed her last on June 18 after cops allegedly assaulted her.

Kanpur: Hindu families put “for sale” signs outside their houses after being forced to convert to Islam, SP MLA accused of shielding the goons

10 Hindu families in Rail Patri colony in Kanpur live under constant fear as they have been threatened either to covert to Islam or leave the area.

Recently Popular

‘Is your father a mali or chowkidar? I will cancel your license, H*r*m*zade’: Maneka Gandhi threatens vets in viral audios

The Indian Veterinary Association in a letter have condemned the unruly behavior and unparliamentary language used by Maneka Gandhi against animal doctors.

Ravish Kumar appears massively frustrated as India administers 85 lakh COVID vaccines in single day, this is why he does not make sense

Ravish Kumar goes on a ranting spree to hate on PM Modi by camouflaging propaganda as 'criticism' over COVID-19 vaccination

How Venkatesh Prasad is winning hearts with his ‘Sanghi’ posts, one tweet at a time

Venkatesh Prasad demonstrated the Surya Namaskar for his followers, performed in deference to the Sun God.

After being slammed by Bombay HC for lack of evidence, Mumbai police names Arnab Goswami as an accused in second TRP chargesheet

Republic TV had submitted before Bombay HC that Mumbai Police have deliberately not named Arnab Goswami in charge sheet to keep the investigation open

Oxfam says reporting rape cases harms black and marginalised people, blames ‘privileged white women’ for root causes of sexual violence

Oxfam says that fighting against sexual assault legitimises criminal punishment, which harms black and other marginalised people
- Advertisement -


Connect with us