Suraksha group takes over stalled Jaypee projects

Mumbai based Suraksha Realty Limited and Lakshdeep Investments, which won the bid to take over debt-ridden Jaypee Infratech Limited (JIL), has started the process of reviving Jaypee’s stuck realty projects in Noida and Greater Noida has stated in its resolution plan that it will take about five years to complete all projects and deliver flats to thousands of homebuyers.

Suraksha group plans to infuse a working capital of 3,000 crore to revive construction, said the resolution plan submitted before the National Company Law Tribunal (NCLT).

Suraksha, however, when contacted refused comment on the issue.

At least 20,000 homebuyers of Jaypee Wish Town projects in Noida and Greater Noida have been waiting nearly a decade to get their homes, for which many of them have paid over 50% of the total flat cost.

Since 2017, the Supreme Court monitored NCLT has been hearing the corporate insolvency resolution process (CIRP) application of Jaypee Infratech Limited, which failed to deliver its realty projects in Noida, citing financial duress.

According to the Indian Bankruptcy Code provisions, when a company fails to deliver its promises amid a financial crisis, new companies step in to revive the debt-ridden firm. Subsequently, a committee of creditors (CoC) consisting of homebuyers/investors, lenders and other stakeholders, approves a resolution plan through voting to revive the insolvent firm. Following the CoC approval, the NCLT that on March 7 also approved the plan of Suraksha Group.

As per the plan, Suraksha will infuse 3,000 crore working capital, and will get 250 crore from the group company and equity infusion, 1,462 crore will be recovered from homebuyers in the form of remaining payments towards flat cost and 345 crore will be collected as toll on the 165km Yamuna Expressway, which is owned by the Jaypee Infratech Limited.

“The company will get 5,057 crore in funds under different heads in initial one year against 2,473 crore amount that will be spent under different heads to revive constructions at sites,” said the resolution plan.

“In the first year it will spend 5 crore on insolvency resolution process, 1 crore on payments to operational creditors, 25 crore on payments to FD (fixed deposit) holders, 32 crore on payments to refund seekers, 2,029 crore on construction of different projects, 330 crore on interest on working capital, and 50 crore on corporate expenses,” said the plan.

The resolution plan has come as a shock to the Yamuna Expressway Industrial Development Authority (Yeida) as it will not be able to recover its funds from Suraksha Group as per the terms approved by the NCLT.

Yeida had wanted to recover 1,689 crore from Jaypee Infratech Limited or subsequent resolution company- Suraksha Group as 64.7% hiked land compensation and 6111.591 crore as additional land compensation have to be paid to farmers whose land was acquired by teh authority and allotted to Jaypee. But the NCLT in its order has said the Yeida can only get 10 lakh against 1,689 crore and 20 lakh against 6,111.591 crore.

Yeida chief executive officer Arun Vir Singh said, “We will adhere to NCLT order and take legal course after consulting with our legal department.”

Meanwhile, homebuyers are eagerly awaiting the takeover by Suraksha group so that construction can restart.

“We are happy that Suraksha group will in the next seven days begin construction work as is stated in the resolution plan. But we fear that the NCLT approved resolution plan may give way to fresh legal battles as Yeida may approach the courts to claim its dues,” said Ashish Mohan Gupta, president, Jaypee Infratech Limited Real Estate Allottees Welfare Association, an association of Jaypee homebuyers.

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