Sunday, February 28, 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

Hindu Mahasabha asks Rahul Gandhi to change Congress’ name to ‘Godsevadi Congress’ after Godse follower joined party: Read why

Hindu Mahasabha has advised Congress leader Rahul Gandhi to change the name of the Congress party to Godsevadi Congress.

As desperate Pakistan welcomes the Indo-Pak ceasefire with much fanfare, India takes it with a caution

The latest ceasefire agreement between India and Pakistan comes nearly 17 years after such an agreement was first signed

Encryption vs Compliance: The new IT Act guidelines put messaging services like WhatsApp in a tight situation

To comply with the new IT Act guidelines, services like WhatsApp will have to break its famous end-to-end encryption

Is Yogendra Yadav now an anti-election activist?

“We should have an outcome very soon, we do not have a mandate.” These were the words of Yogendra Yadav after Bihar elections

Yogi Adityanath’s Uttar Pradesh advances to the second position on the GSDP list ahead of Tamil Nadu, was fifth only a year ago

Amidst economic gloom induced by the pandemic, Uttar Pradesh under the leadership of Yogi Adityanath has recorded impressive GSDP figures

A 2 minute video with 16 cuts: Pakistan releases new doctored video of Wing Commander Abhinandan days after committing to peace at LoC

Pakistan has released a new video of Wing Commander Abhinandan who had fallen into the hands of the Pakistani Army.

Recently Popular

Did Aamir Khan’s daughter Ira Khan elope with her Hindu servant? Here is the truth

The image that is being used to claim that Iran Khan has 'eloped with her Hindu servant' was originally shared by Nupur Shikare, her fitness trainer. The two were posing on the occasion of Diwali.

US President Joe Biden casually drops the N-word during Munich Security Conference, accused of racism on social media

The N-word is considered as one of the hateful words that were first uttered in the 17th century. Its origin can be traced back to the Spanish word 'negro', which is often used by white supremacists to deliberately offend the African-American community.

Father of Richa Bharti, the girl who had refused to distribute Quran to secure bail, shot dead in native Bihar village: Read details

The father of the daring Bihar girl Richa Bharti has been shot down by assailants in her native village of Nalanda district in Bihar.

Father of 6, Mehtab Rana, abducts minor by shrouding her in Burqa, had abducted the girl twice in 2018, role of in-laws, family suspected

Kidnapping of a 17-year-old girl in Agra, where accused made her wear a 'burqa', has sent shockwaves and resulted in outrage

‘His opinion less than objective and reliable, his conduct questionable’, says UK court about justice Markandey Katju in Nirav Modi extradition order

The UK Court rejected Justice Katju's argument that Nirav Modi will not get fair trial in India, and exposed his hypocrisy

“A contest between my ball and your ball”: Netizens in splits after comments of Harsha Bhogle go viral

Harsha Bhohgle said that a cricket contest should be between bat and ball, not between bat and bat or ball and ball
- Advertisement -


Connect with us