Jaiprakash bankruptcy case heads to court after bid rejection over EMD

Business Standard

3 days ago

New Delhi-based real estate firm Jaiprakash Infratech Ltd is preparing to challenge in court the rejection of its bid to acquire Jaiprakash Associates Ltd, potentially delaying the bankruptcy resolution of the debt-laden infrastructure and cement major.
Lenders turned down Jaiprakash Infratech's offer citing an insufficient earnest money deposit (EMD), according to people familiar with the matter. The company had proposed a lien over fixed deposits in place of a ₹100 crore deposit. However, the bid was rejected on grounds of non-compliance with the prescribed format and delays in submission.
'The lien over the fixed deposits was legally valid and submitted on time,' said a person close to the company, who asked not to be named. 'We have no option but to move the court and remain in the race.'
Jaiprakash Infratech was taken over by Mumbai-based Suraksha Group in June 2024. The firm is currently focused on completing stalled housing projects that have left homebuyers waiting for over a decade.
Jaiprakash Associates was referred for debt resolution after defaulting on loans worth ₹57,000 crore. In March, Indian lenders transferred the dues to the National Asset Reconstruction Company (NARCL).
The resolution process may now face further delay, even as Gautam Adani's group has emerged as the lead contender with an unconditional bid. Competing offers from Dalmia Bharat, Vedanta Group, Jindal Power, and PNC Infratech reportedly include various conditions.
Lenders have asked all bidders to submit revised, unconditional offers as the process progresses.
Several of the conditional offers hinge on the fate of Jaiprakash Associates' 1,000-hectare Sports City project in Greater Noida. In March, the Allahabad High Court upheld the cancellation of land allotment for the project by the Yamuna Expressway Industrial Development Authority. That decision is currently under appeal in the Supreme Court.