NEW DELHI: Jaiprakash Associates Ltd, the erstwhile promoter of bankrupt-Jaypee Infratech, has said its settlement proposal without any "haircuts" should be considered by the creditors' panel, which is set to take a call on two existing resolution plans for the company this week. "JIL's lenders would not be entitled to exercise their rights against JIL's guarantors as the lenders themselves are voluntarily and willingly allowing one of the resolution applicants to acquire JIL at a throw away price," he said in the 10-page letter dated May 23.Further, he said that such a move would amount to unjust enrichment of one of the resolution applicants at the cost of the guarantors of JIL. "The continuing obligation/ liability, as held by the Hon'ble Supreme Court, simultaneously provides a legal right/ entitlement to the guarantors to the loans of JIL to object to any resolution plan and/or CIRP, which envisages resolution of insolvency at a reduced value of assets or by taking huge haircuts as it has the effect of impinging on the rights of the guarantors," he said.JIL is undergoing Corporate Insolvency Resolution Process (CIRP) under the Insolvency and Bankruptcy Code.In the letter, which has also been addressed to the CoC, Gaur said the present case is rarest of the rare wherein JIL's valuation is ever increasing while liabilities are constantly diminishing. "Therefore, it is not a case wherein the lenders by an involuntary process i.e. by operation of law (insolvency proceedings) are compelled to accept one of the resolution plans and settle with their borrower (corporate debtor) after taking huge haircuts," he said.Noting that its offer is being "ignored repeatedly", Gaur said he was not able to comprehend as to how and why the lenders have been unwilling to accept the proposal and "are continuously putting resolution plans to vote which entails exorbitant haircuts".Gaur also said that if the lenders choose to ignore the settlement offer by JAL and himself without any haircuts, it will be a voluntary act of the lenders in their wisdom willingly to settle their dues at a reduced value.On Monday, the CoC deferred the voting process on Suraksha group's offer to acquire JIL amid NBCC raising objections.The CoC has decided to conduct voting on May 27-28 on whether Suraksha group and NBCC should be allowed to submit their fresh resolution plans.This is the fourth round of bidding process as per the directions of the Supreme Court in March 2021.

Source: Economic Times May 26, 2021 04:30 UTC