Suraksha Group Acquires Jaypee Infratech Triumphantly
Suraksha Group Acquires Jaypee Infratech through an insolvency process, following the approval of its resolution plan by the National Company Law Tribunal (NCLT) in March 2023. The acquisition was finalized after the National Company Law Appellate Tribunal (NCLAT) upheld the decision in May 2023, allowing Suraksha Group to take control in June.
As part of the resolution plan, Suraksha Group Acquires Jaypee Infratech and identifies 2,552 acres of land parcels to be allocated to the lenders of JIL. This includes 2,372 acres for assenting lenders and an additional 180 acres specifically for ICICI Bank. The real estate consultancy CBRE was engaged to assist in the land identification process. JIL originally owned approximately 6,250 acres in the Delhi-NCR region and surrounding areas.
Suraksha Group Acquires Jaypee Infratech with a commitment to completing around 20,000 unfinished residential units in the Delhi-NCR area. To fund these projects, the group has injected Rs 125 crore in equity and Rs 125 crore in debt into JIL, in addition to securing a Rs 3,000 crore loan facility. Additionally, JIL has approximately Rs 1,250 crore in cash reserves, accumulated from its real estate operations and toll revenues from the Yamuna Expressway.
The total investment required to complete the construction of nearly 160 residential towers is estimated to be between Rs 6,500 crore and Rs 7,000 crore. Prior to the takeover, construction was active on only 62 towers, with work on the remaining 97 towers stalled. Suraksha Group has since accelerated construction on the active towers and is in the process of awarding contracts for the stalled ones, expecting full construction activity to resume by October.
Following the acquisition, governance changes include the appointment of Sudhir V Valia as a Non-Executive Director on the JIL board, Aalok Champak Dave as an Executive Director, and Usha Anil Kadam as an independent director. By acquiring Jaypee Infratech, Suraksha Group aims to prevent further delays in the resolution process and safeguard the interests of all stakeholders. The NCLAT has also directed Suraksha Group to pay an additional Rs 1,334 crore to the Yamuna Expressway Industrial Development Authority (YEIDA) as compensation to farmers, although YEIDA has appealed for more compensation in the Supreme Court.
Jaypee Infratech entered the Corporate Insolvency Resolution Process (CIRP) in August 2017, initiated by an IDBI Bank-led consortium. The lenders had claimed Rs 9,783 crore. In the fourth round of bidding in 2021, Suraksha Group Acquires Jaypee Infratech with 98.66% of the votes, narrowly surpassing NBCC. The acquisition marks a significant step in resolving JIL’s insolvency issues and completing long-pending projects.
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