NBCC on Friday wrote back to Jaypee Infratech’s (JIL) committee of creditors (CoC) assuring them that it has received a positive response from Yamuna Expressway Industrial Development Authority (YEIDA) for separation of land into two SPVs, but as per provisions of the concession agreement inked between YEIDA and Jaiprakash Associates (JAL) in 2003. People in the know of the development said NBCC’s letter was in response to a fresh query raised by a homebuyer regarding YEIDA’s consent on separation of Yamuna Expressway and land banks into two special purpose vehicles (SPVs). JIL CoC is at present voting on the revised resolution plans of NBCC and the consortium led by Suraksha Realty. The voting began on June 14 and will end on Wednesday.
NBCC emphasised that creating two SPVs — Yamuna Expressway and Land Bank — is crucial for having a commercially viable plan in interest of stakeholders, including lenders, one of the sources said, adding, “It will ensure administrative convenience, tax effective mechanism and feasibility of transfer of assets and liabilities. Besides, other assets and balance lands will remain with JIL and can be monetised as convenient”.
The state-run firm reiterated that Supreme Court’s March 24 order clearly states that YEIDA does not stand to oppose the resolution plan and would like it to succeed, but as per the concession agreement. It also said that creating two SPVs are allowed through compliance of the concession agreement, another source said.
The concession agreement was signed between YEIDA (then Taj Expressway Industrial Development Authority) and JAL in February 2003. JAL’s rights were transferred to a SPV, JIL in October 2007. The concession period is for 36 years from 2012 to 2048.
During the June 10 CoC meeting NBCC had informed about its correspondence with YEIDA on the issue. On May 31, NBCC had approached YEIDA for an in-principle approval on the tripartite agreement, which will be executed between YEIDA, SPV and JIL, the second source said.
On June 1, YEIDA responded positively to NBCC’s request stating that it is bound by signing the tripartite agreement. However, it observed that the decision for grant of concessions will require clearance from competent authority, he added.
“In yesterday’s letter, NBCC said it is in constant touch with YEIDA. It assured about initiating the process as soon as the CoC approves its revised bid. NBCC is also working on signing the tripartite agreement before its resolution plan is submitted to the NCLT,” a senior executive with one of the lenders said.
The official said YEIDA on June 1 clearly stated that provisions for executing the tripartite agreement are in the concession agreement and YEIDA is bound by it, but will have to be vetted by its competent authority.