The resolution process of Jaypee Infratech Ltd (JIL) seems to be heading towards yet another period of stalemate as the lenders want withdrawn the conditions mentioned by NBCC in its bid, while the state-run construction major is unlikely to remove these clauses.
According to sources here, NBCC will not withdraw the conditions mentioned in its bid as asked by the lenders since the company would need to get its board's approval, which will, however, not meet by May 13.
The CoC (committee of creditors) has sought NBCC's reply May 13.
Although NBCC may make few changes in the "wordings" of its bid, but it will not change the "theme and principles" of the plan, the sources said.
Lenders of JIL asked NBCC in its meeting on Friday to withdraw some of its clauses, including that of exemption from a tax liability.
NBCC's bid seeks the cancellation of an estimated income tax liability of Rs 33,000 crore due over a period of 30 years under the concession agreement for the transfer of land from the Yamuna Expressway Industrial Development Authority (YEIDA) to Jaypee Infratech.
The PSU (public sector undertaking) also sought relief from taking consent of the YEIDA for any business transfer between JIL and Yamuna Expressway SPV for transfer of assets as well as land parcels from JIL to the land bank "special purpose vehicle" (SPV).
The lenders want these clauses to be removed as it makes the bid conditional, which goes against that CoC's process note, according to which the resolution plan should be binding and non-conditional. Earlier, the Insolvency Resolution Professional (IRP) Anuj Jain also raised a red flag about the bid being conditional in a letter to the CoC on May 2.
The CoC will meet on Tuesday, May 14, to discuss NBCC's reply to the clarifications it had sought.
The standoff between the lenders and NBCC is unlikely to die down and sources say even if the latter's bid is put to vote, it may not make it through and would fail. The CoC is likely to decide on May 14 on whether the bid should be voted upon.
If the bid fails, the IRP may move for liquidation as the 270-day deadline to resolve the insolvency case has already ended on May 6. The bid was taken up for consideration after the Ahmedabad bench of the National Company Law Tribunal (NCLT) directed the CoC to consider the bid and continue the corporate insolvency resolution process (CIRP) till its next hearing on May 21.
It is the only bid to be considered by the CoC after the lenders rejected Mumbai-based Suraksha Realty's bid.
NBCC's earlier revised bid to acquire the insolvent realty firm was not accepted as it needed approvals from ministries and government departments. The NBCC subsequently received all the necessary clearances by May 1 and filed an application to the IRP for consideration of its bid.
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