Suraksha Asset Reconstruction company may pip Adani, Kotak to acquire Jaypee Infra...

    Suraksha Asset Reconstruction company may pip Adani, Kotak to acquire Jaypee Infra

    Sudhir Valia of Suraksha Asset Reconstruction Company has emerged as the surprise frontrunner to acquire Jaypee Infratech, the insolvency-hit company that has to deliver around 25,000 houses in Noida and also runs Taj Expressway.
    Suraksha Asset Reconstruction

    Valia is a relative of Sun Pharma promoter Dilip Sanghvi and a director on the company’s board. The offer by the low-profile businessman is estimated to be around Rs 7,000 crore, based on current valuations.

    It’s better than Adani Group’s Rs 5,500 crore bid, a source privy to the discussions told TOI. Adani Group is also believed to have put tough conditions that are unacceptable to banks. While a consortium comprising Kotak Realty and Cube Highways has offered around Rs 8,000 crore, it wants to separate the highway operations from the real estate project. “Valia’s offer is far more flexible,” a source said. A final decision on the winning bid is yet to be taken, the sources added.

    While an early resolution of the question of who will acquire Jaypee Infratech will provide comfort to thousands of home buyers of the much delayed project, Valia intends to finish construction of flats in five years — at least two years more than the current schedule for completion. In addition, the bidder wants exemptions from payment of penalties. Valia could not be reached for comment.

    Sources said Valia has offered to invest Rs 3,000-3,500 crore towards construction of flats and has indicated Yes Bank will provide funds. Yes Bank is already a lender to Jaypee Hospital (a part of Jaypee Infratech) and had earlier offered loans at 16% to Jaiprakash Associates, the majority shareholder in the company facing insolvency proceedings. But the deal did not go through as other lenders believed that the money would only be used to avoid NPA tag for the hospital venture. The offer also involves an upfront payment of around Rs 2,000 crore to lenders, and swapping land for loans of around Rs 5,000 crore, sources said. The preference for Valia came at a meeting of the committee of creditors on Monday.

    Banks will hold further discussions with the bidder to try and get a better deal given that the liquidation value of the project is estimated to be around Rs 8,000 crore. Total loans to the project add up to around Rs 10,000 crore. Lenders are not likely to opt for liquidation given the public interest involved and SC’s insistence that the interest of the home buyers needs to be protected.

    Adani Group, which was once the frontrunner, is believed to have put tough riders in Monday’s meeting that included waiver from payment of compensation to home buyers and farmers and waiver of land transfer charges. This was unacceptable to banks. It’s bid too was lower than the other two on the table.

    Although Valia is a promoter in Suraksha Realty, a company he floated over 15 years ago, he has no experience in Delhi NCR and Jaypee Infra’s scale of operations is massive.