Lenders have transferred the entire Rs 9,234-crore Jaypee Infratech loan to newly constituted National Asset Reconstruction Company (NARCL). This is the maiden acquisition by the government-promoted bad loan bank that was set a year ago. Under the arrangement, the NARCL will only acquire Jaypee Infratech loans that are currently held by 9 public sector banks. In a Swiss challenge auction held on October 27, 2022, in response to NARCL’s Rs 3,570-crore offer for the Rs 9,234 crore of debt, lenders failed to draw counterbids.
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Sixty-two per cent of the recognised claims against the distressed real estate developer are constituted of homebuyers, owners of fixed deposits, and private banks.
The government-sponsored National Asset Reconstruction Company’s (NARCL) pledge to only acquire Jaypee Infratech loans that are currently held by public sector banks (PSB).
According to NARCL’s offer, lenders would receive a 39 per cent recovery. The NARCL’s offer would amount to Rs 9,345 crore if the same offer of 39 per cent recovery is provided to all claimants. The IRP has admitted claims totalling Rs 24,211 crore.
Swiss Challenge method is one of the ways of awarding government contracts to private players. Without an invitation from government, a private player can submit a proposal to government for development of an infrastructure project with exclusive intellectual property rights. Then government has two options with it:
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