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.

- Advertisement - - Article resumes -

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.

Share This Post With Your Friends & Fans:
We need your support to survive in the media industry. Please consider paying us for the content we produce:

To know more about these payments, please click here.

Election 2019 Live Updates

Track all the updates on one page as the results and trends trickle in

Shehla Rashid remembers 2014, says she had wanted Kejriwal as PM

Shehla Rashid loses it early on counting day, says “Felt like a Muslim when ‘mass murderer’ won in 2014”

As early trends show an NDA victory, Shehla Rashid calls him a mass murderer, says she had wanted Arvind Kejriwal as PM in 2014 and she had felt like a 'Muslim'.

Live updates: According to EC, BJP leading in 299 seats on their own, clocks victory in 2, taking their tally possibly to 301

Latest results, trends, updates, and news about 2019 Lok Sabha election counting. Find out who will form the next government.
NYT peddles Modi 2.0 as victory of India's most divisive leader

Dear New York Times, India has chosen Modi 2.0, deal with it

When India gives a thumping, unprecedented, overwhelming victory to a man who has made every single Indian feel proud of their nation and heritage, the NYT's heartburn is expected. 
Rana Ayyub had a meltdown seeing BJP securing an unprecedented victory

Unprecedented Modi victory triggers meltdown for controversial journalist Rana Ayyub

Prospect of a stunning Narendra Modi victory in 2019 Lok Sabha election triggered a mental collapse for controversial journalist Rana Ayyub

IIT graduate and an IAS officer explains in detail why EVMs can’t be ‘hacked’ or ‘tampered’ with

Bhavesh Mishra, IAS 2015 batch, B.Tech IIT Delhi, on Quora gave a detailed explanation regarding why EVMs cannot be 'hacked' or 'tampered' with.
Reactions of Liberals after NDA appearing to secure majority

‘Liberals’ have a meltdown as result day trends indicate a massive victory for PM Modi

Trends indicate that Prime Minister Narendra Modi will once again take an oath for the post of Prime Minister. This has not gone down well with the Liberal intelligentsia and they are losing their cool over this prospect

Kanhaiya Kumar’s family uses LPG stove to prepare for his victory, contrary to his claims just a few weeks ago

Kanhaiya had claimed that his mother cooked on a Chullah and not on an LPG stove as it was not viable because of being too expensive and also exhausted within 3-4 days.

Barkha Dutt expresses deep anguish over the fact that the mainstream media can no longer influence elections

Barkha said it doesn't make her happy that mainstream media cannot influence the voters to vote in a particular way anymore.

AAP’s Sanjay Singh wants Arnab Goswami to either go to a mental asylum, be jailed or drowned

AAP's Sanjay Singh was reacting to a clip by Arnab where he was mocking the Opposition for their EVM drama
PM Modi slammed Mayawati for not defending the people of UP and Bihar against TMC government's accusations

23rd May 2019: When the future of Bengal politics was changed forever

Whatever the ultimate result may be, one thing is for certain, going into the 2021 Assembly Elections in the state, for the first time in history, West Bengal will have a party of saffron hue as the primary opposition.
Subscribe to Day's Top Stories

Latest articles

Connect with us

Share This Post With Your Friends & Fans: