Jaiprakash Associates defaults on Rs 46.16 billion loans

08 May 2024 CW Team

Jaiprakash Associates, the flagship firm of the crisis-hit Jaypee Group, has announced a default on loans totalling Rs 46.16 billion, encompassing both principal and interest amounts. The disclosure, made in a regulatory filing, stated that Jaiprakash Associates (JAL) had failed to repay a principal sum of Rs 17.51 billion and interest amounting to Rs 28.65 billion on April 30.

According to JAL, the company's total borrowing, inclusive of interest, stands at Rs 298.05 billion, with a repayment deadline of 2037. However, as of April 30, 2024, only Rs 46.16 billion remains outstanding.

The loans in question were acquired from various banks and encompass fund-based working capital, non-fund-based working capital, term loans, and FCCBs (foreign currency convertible bonds).

Out of the total borrowing, JAL plans to transfer Rs 189.55 billion to a proposed Special Purpose Vehicle (SPV). This transfer is contingent upon the approval of a Scheme of Arrangement by all stakeholders, which is currently awaiting sanction from the National Company Law Tribunal (NCLT). The company asserts that the entire loan is undergoing restructuring.

JAL has emphasised its commitment to reducing borrowings and anticipates that, following the proposed divestment of its cement business and on-going restructuring efforts, the borrowing will significantly decrease, potentially reaching negligible levels upon the implementation of the revised restructuring plan.

Additionally, JAL disclosed that ICICI Bank and the State Bank of India have both initiated legal proceedings against the company under Section 7 of the Insolvency and Bankruptcy Code (IBC) 2016. JAL has contested ICICI Bank's move and stated that the matter is pending, to be decided in conjunction with the approval of the Scheme of Arrangement by the NCLT.

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