Jaypee to get JSW Group funds for stuck projects in Noida
The Jaypee Group is currently developing 305 towers over two projects in Noida. Of these, 250 towers are incomplete.noida Updated: Nov 10, 2017 23:30 IST
The JSW Group will pick up 30% stake in the Jaypee Group, allowing the struggling real-estate firm to complete 26,000 undelivered flats in its Wish Town and Aman projects in Noida, a top Jaypee official said on Friday.
JSW is a multi-billion-dollar conglomerate with interests in steel, energy, infrastructure and cement.
“After several rounds of negotiations, the JSW Group has agreed to pump in funds in Jaypee Infratech and Jayprakash Associates Limited, thereby helping us finish the stuck housing projects, namely Wish Town and Jaypee Aman. We are happy with the deal because we will be able to deliver flats and fulfil promises made to homebuyers and investors,” Sunny Gaur, senior director of Jaiprakash Associates Limited, told Hindustan Times.
“Delivery of flats will happen as per schedule in all towers now because the 70-30 partnership will yield required funds to finish stuck projects. The investment details of this partnership will be made public soon,” he said.
When contacted, JSW officials declined to comment. Insolvency proceedings against Jaypee were admitted by the Allahabad bench of the National Company Law Tribunal in August after IDBI Bank, the lead consortium of lenders, moved a petition that the company defaulted on a Rs 526-crore loan.
Homebuyers who had booked flats but did not get possession approached the Supreme Court, saying insolvency proceedings could deprive them of any refunds. According to India’s insolvency and bankruptcy code, homebuyers are not secured creditors. They can get their money back if something is left after repaying financial institutions such as banks.
In September, the top court stayed insolvency proceedings against Jaypee. It also appointed an interim resolution professional (IRP) to work out a plan to protect the interests of homebuyers and creditors.
The Jaypee Group is currently developing 305 towers over two projects in Noida. Of these, 250 towers are incomplete, and an investment of Rs 2,500 crore is required to finish the projects.
Gaur said JSW and Jaypee will together submit their plans of revival of the realty projects. The revival plan has to be approved by the committee of creditors. “Once we submit our plan, we will share detailed delivery schedule with buyers,” Gaur said.
First Published: Nov 10, 2017 23:30 IST