Crisis-hit Jaiprakash Associates defaults on Rs 3,961-crore loans on May 31

The crisis-hit Jaypee Group flagship Jaiprakash Associates defaulted on loans worth Rs 3,961 crore, including principal and interest amount.

In a regulatory filing, Jaiprakash Associates Ltd (JAL) reported that on May 31 the company defaulted on principal of Rs. 1,600 crores and interest of Rs. 2,361 crores.

Loans related to various banks, the nature of the obligation is Fund-Based Working Capital, Non-Fund-Based Working Capital, Term Loans and FCCB (Foreign Currency Convertible Bonds).

“Total borrowing (including interest) of the company is Rs. 29,429 crore, to be repaid by 2037, as against only Rs. 3,961 crore overdue on May 31, 2023,” JAL said.

Of the total borrowing of Rs.29,429 crore, the company said that Rs.18,231 crore will be further reduced upon conversion to SPV whose arrangement scheme has been duly approved by all stakeholders, pending national approval. Corporations Law Tribunal (NCLT).

“In any case, the entire loan is subject to restructuring,” she added.

The company said it was taking concrete steps to reduce borrowing.

“After liquidating the proposed investments for the cement and restructuring business under study, borrowing will become almost non-existent when the revised restructuring plan is implemented,” the statement said.

JAL also said that ICICI Bank had approached NCLT Allahabad on a directive from the Reserve Bank of India under Section 7 of the Insolvency and Bankruptcy Act 2016 against the company. He objected to this move.

“The matter is pending to be decided in conjunction with the plan of arrangement for the transfer of the properties to SPV to be approved by the NCLT,” the lawsuit states.

In September 2018, ICICI Bank filed a bankruptcy petition against JAL. The country’s largest lender SBI has also moved NCLT against JAL, claiming a total default of Rs 6,893.15 crore as of September 15, 2022.

Recently, JAL and its group companies announced the sale of remaining cement assets to Dalmia Bharat Ltd with an institutional value of Rs. 5,666 crore and exit from the sector as part of its debt reduction strategy.

Earlier, as part of the debt settlement process, JAL sold more than 20 million tons per annum of cement to UltraTech Cement of the Aditya Birla Group between 2014 and 2017.

In its former subsidiary Jaypee Infratech Ltd (JIL), Mumbai-based real estate firm Suraksha Group in March secured approval from NCLT for its discussion to take over JIL and complete around 20,000 flats in Noida. However, several parties have turned to the National Corporate Law Appeals Tribunal (NCLAT) against the NCLT’s order.