Suraksha Group Allocates 2,552 Acres of Land for Jaypee Infratech Lenders in Delhi-NCR
The Suraksha Group has taken a significant step forward in the revival of Jaypee Infratech Ltd. The group is focusing on completing the construction of 20,000 pending flats in Delhi-NCR, for which they have recently allocated 2,552 acres of land for the lenders of Jaypee Infratech. This move comes after the National Company Law Appellate Tribunal’s decision on May 24 to uphold Suraksha Group’s bid to acquire Jaypee Infratech. The group has also invested Rs 125 crore as equity and arranged a Rs 3,000 crore loan to facilitate the completion of the pending projects.
Focusing on Completing the Pending Projects
One of the main objectives of Suraksha Group is to complete the construction of 20,000 pending flats in Delhi-NCR. To achieve this, the group has accelerated the construction work on several stalled towers. Before the takeover by Suraksha Group, construction work was ongoing in only 62 towers, while activities in the remaining 97 towers were completely stalled. However, Suraksha Group has already awarded contracts for 41 towers to various construction companies and plans to issue work orders for the remaining 56 towers soon. This approach aims to expedite the construction process, and sources expect construction activities to be in full swing by October.
Resolution Plan and Land Allocation
In the resolution plan approved by the National Company Law Tribunal in March last year, Suraksha Group offered more than 2,500 acres of land to settle the dues of the lenders. As per the plan, 2,372 acres of land have been earmarked for the assenting lenders, while an additional 180 acres have been allocated separately for ICICI. This decision was taken after enlisting the help of real estate consultant CBRE to assist in the identification process. Jaypee Infratech had approximately 6,250 acres of land in Delhi-NCR and adjoining areas, providing Suraksha Group with the necessary resources to complete the pending projects.
Financial Support and Cash Availability
Suraksha Group has shown a strong commitment to completing the projects by injecting Rs 125 crore as equity and another Rs 125 crore as debt into Jaypee Infratech. In addition, they have secured a Rs 3,000 crore loan facility. Suraksha Group is well-prepared in terms of financial resources, with the JIL balance sheet showing around Rs 1,000 crore in cash. This amount has been accumulated from the real estate business and toll income generated from the Yamuna Expressway connecting Greater Noida and Agra, bringing the total available cash in JIL to Rs 1,250 crore.
Estimated Investment and Importance of Completion Certificates
To complete around 160 residential towers across various projects, Suraksha Group estimates that an investment of Rs 6,500-7,000 crore will be required. As part of their strategy, the group has prioritized the completion of construction work in the 62 towers that were already in progress. They have also initiated the process of applying for completion certificates for the finished buildings. Furthermore, contracts for 41 out of the 97 completely stalled towers have already been awarded to different construction companies, and work orders for the remaining 56 towers are expected to be issued soon.
New Management and Legal Challenges
Following the acquisition of Jaypee Infratech through the insolvency process, Suraksha Group constituted a new board for the company. Sudhir V Valia, promoter of Suraksha Group, was appointed as a Non-Executive Director, along with Aalok Champak Dave as Executive Director and Usha Anil Kadam as an Independent Director. The move was made to ensure the smooth implementation of the resolution plan and protect the interests of all stakeholders. However, challenges persist, as the Yamuna Expressway Industrial Development Authority has recently appealed to the Supreme Court seeking additional compensation. Suraksha Group has been directed to pay Rs 1,334 crore to YEIDA as farmers’ compensation.
Long Path to Revival
Jaypee Infratech has been under the Corporate Insolvency Resolution Process since August 2017, after an application by the IDBI Bank-led consortium. The road to the revival of the company has been complex and arduous with multiple rounds of bidding and legal battles. Only in the fourth round of the bidding process in 2021 did Suraksha Group’s bid emerge as the winner with 98.66% of the votes. The group’s commitment to completing the pending projects and the allocation of 2,552 acres of land highlight their dedication towards revitalizing Jaypee Infratech and delivering on their promise of quality housing to thousands of homebuyers.
In conclusion, the recent allocation of 2,552 acres of land by Suraksha Group for Jaypee Infratech lenders in Delhi-NCR marks a significant milestone in the construction and rehabilitation of pending projects. The group’s investment of financial resources and acceleration of construction work demonstrates their commitment to completing all unfinished flats. With contracts awarded and work orders imminent, Suraksha Group aims to expedite the construction process and expects construction activities to be in full swing by October. This positive development provides hope for the thousands of homebuyers eagerly waiting for the completion of their dream homes.
