A consortium of Kotak Investment Advisors and Cube Highways has proposed to pay an upfront consideration of Rs 3,300 crore in cash to help the resolution process of embattled real estate company Jaypee Infratech.
“This Rs 3,300 crore of cash could be held in escrow to be used as the Supreme Court deems fit to satisfy homeowners and creditors,” it said in a letter to the committee of creditors and resolution professional Anuj Jain.
The Kotak-Cube consortium had earlier proposed to set aside Rs 6,000 crore for constructing 25,000 undelivered homes while offering to pay all lenders and promising that banks will not have to take a ‘haircut’ on their exposure.
Kotak was also aiming to develop and monetise the high land bank available to Jaypee Infratech all the way from Noida to Agra along two expressways, while Cube Highways was looking to tap the revenue potential from the Taj Expressway, where traffic is expected to increase with Agra being linked to Lucknow through a new expressway.
“We, hereby, would like to reiterate our continued interest and commitment to the resolution of JIL. We are happy to work with all stakeholders to expeditiously conclude the transaction in a mutually acceptable manner,” the latest letter said.
The consortium also said it will constitute a profit-sharing mechanism based on certain traffic and revenue thresholds being met by the expressway. This mechanism can result in additional payments of up to `12,640 crore in future for stakeholders, if targets are met.
They also said they would act as an independent, non-conflicted third party to provide upfront liquidity against the expressway to enable any solution for restarting and completing the construction of the stalled real estate projects as may be chosen by stakeholders.
The consortium has finished its due diligence of the expressway and has approvals of the internal investment committee and the board to proceed with the transaction.
Kotak-Cube is also willing to sign a binding sale and purchase agreement immediately upon an order by the Supreme Court for hiving off the expressway asset without any past liabilities of JIL.
The consortium has also assured the CoC to close and fund the transaction within 15 days of receiving approvals from the government of Uttar Pradesh, YEIDA, tax authorities and creditors to JIL to effect the transaction.
“It is evident to us that a significant amount of upfront cash infusion would be required to restart and complete construction of the stalled real estate projects and deliver completed and constructed homes to 32,916 buyers, which is an integral part of the resolution plan for JIL. We believe that the immediate monetisation of the expressway will provide sufficient liquidity for the projects to resume construction for the benefit of all stakeholders and we stand ready to provide this capital,” the letter said.
The bids of Lakshadweep, the top bidder, was finally considered by the CoC but was rejected in the final voting for the bids. The Rs 7,350-crore offer of Lakshadweep rejected as it was below the liquidation value of Jaypee Infratech, which is around Rs 14,000 crore.
