Suraksha Group Takes Control Of Jaypee Infratech, To Revive Stalled Projects

In a big relief to over 20,000 homebuyers, Suraksha Group has taken control of the debt-ridden realty firm Jaypee Infratech by constituting a three-member board and will soon infuse Rs 125 crore equity fund to start construction of stalled housing projects across Delhi-NCR.

The takeover follows insolvency appellate tribunal NCLAT decision on May 24, upholding Suraksha Realty's bid to acquire Jaypee Infratech while directing it to pay an additional Rs 1,334 crore as farmers' compensation.

According to a regulatory filing by Jaypee Infratech on Wednesday, Suraksha Group informed the Implementation and Monitoring Committee that May 24, 2024, i.e., the date of the NCLAT order should be treated as the 'Approval Date' as defined in the approved resolution plan.

The IMC in its meeting held on Tuesday approved the appointment of Sudhir V Valia, who is promoter of Suraksha Group, as a Non-Executive Director. It approved the appointment of Aalok Champak Dave as Executive Director and Usha Anil Kadam as independent director. Dave has also been appointed as Managing Director and Chief Executive Officer.

According to the filing, Valia was an Executive Director in Sun Pharmaceuticals Industries Ltd. He is a co-founder of Sun Pharmaceutical Industries, one of the leading pharmaceutical companies and world’s fifth largest generic pharmaceutical company.

Valia is a member of the Institute of Chartered Accountants of India and has more than three decades of experience in taxation and finance. He has experience of more than a decade in managing the real estate development activity and infrastructure business through Suraksha Realty and other associates having activity in real estate.

According to sources, Suraksha Group will infuse an equity fund of Rs 125 crore in Jaypee Infratech by June 15 and will soon start the construction process. It will also start making payment to YEIDA as per the schedule.

Upholding the National Company Law Tribunal's decision of March 2023, the NCLAT on May 24 had said the decision was made to avoid any further delay in the implementation of the resolution plan and also to take care of the interests of all stakeholders, including home buyers and claim of Yamuna Express development authority YEIDA for additional compensation of the farmers.

The Corporate Insolvency Resolution Process against Jaypee Infratech Ltd was started in August 2017 over an application by the IDBI Bank-led consortium.

On March 7 last year, the NCLT approved the bid of the Mumbai-based Suraksha group to buy JIL. However, many parties, including YEIDA, filed a petition in the NCLAT TO challenge the NCLT order.

In its 99-page order, the NCLAT had said, 'The impugned order passed by the adjudicating authority insofar as it deals with the claim of the appellant of Rs 1,689 crore of additional farmers compensation is set aside and the rest of the order approving the resolution plan is upheld'.

"Successful Resolution Applicant (Suraksha Group) is directed to make payment to the appellant of its secured operational debt of Rs 1,689 crore in the ratio of 79 per cent, which has been paid to other secured creditors, which amount comes to Rs 1,334.31 crore."

In its final resolution plan, the Suraksha group offered to bankers more than 2,500 acres of land and nearly Rs 1,300 crore by way of issuing non-convertible debentures. It also proposed to complete all pending flats over the next four years.

Lenders of Jaypee Infratech had submitted a claim of Rs 9,783 crore.

In the fourth round of the bidding process to find a buyer for Jaypee Infratech in 2021, the Suraksha group won the bid with 98.66% votes.

As many as 12 banks and more than 20,000 homebuyers had voting rights in the Committee of Creditors.

The company had got 0.12% more votes than state-owned NBCC, which was also in the fray.

In the first round of insolvency proceedings in 2018, the Rs 7,350 crore bid of Lakshadweep, part of the Suraksha group, was rejected by the lenders.

The CoC had rejected the bids of Suraksha and NBCC in the second round held in May-June 2019.

In November 2019, the Supreme Court directed that the revised bids be invited only from NBCC and Suraksha.

Then, in December 2019, the CoC approved the resolution plan of NBCC during the third round of the bidding process.

In March 2020, NBCC got approval from the NCLT to acquire JIL. However, the order was challenged before the NCLAT and later in the Supreme Court.

On March 21, 2021, the apex court ordered a fresh round of bidding between NBCC and Suraksha Group only.