Lenders of Jaiprakash Associates show concerns over settlement offer
ECONOMY & POLICY

Lenders of Jaiprakash Associates show concerns over settlement offer

During the National Company Law Appellate Tribunal (NCLAT) proceedings, counsel for the lenders highlighted that the insolvency plea against Jaiprakash Associates Ltd (JAL) was filed in 2017, and for the past seven years, the company has stalled the process under the guise of settlement. The lenders voiced their apprehensions about the debt-ridden group's one-time settlement (OTS) proposal, expressing their lack of conviction.

Previously, on June 10, 2024, the NCLAT had instructed the banks to review JAL's OTS proposal by June 24. However, during the recent hearing, a two-member vacation bench noted that the banks had not submitted a response to the OTS proposal. The lenders' counsel explained that JAL had issued a last-minute clarification the previous night, necessitating more time for review.

After a brief hearing, the NCLAT scheduled the next hearing for July 3 and directed JAL's lenders to consider the OTS and file a reply. This appeal, filed by Sunil Kumar Sharma, a member of the suspended JAL board, challenges the Allahabad bench of the National Company Law Tribunal (NCLT)'s order. On June 3, the NCLT admitted a six-year-old petition filed by ICICI Bank in September 2018, suspended JAL's board, and appointed Bhuvan Madan as interim resolution professional.

During the last hearing, JAL's counsel stated the company's willingness to make full payment within 18 weeks if the OTS is accepted by the banks. JAL had proposed an OTS with an upfront payment of Rs 2 billion and the remaining Rs 160 billion to be paid within 18 weeks of acceptance. However, this proposal was dismissed by the Allahabad NCLT, which directed the initiation of the Corporate Insolvency Resolution Process (CIRP) against JAL.

The NCLAT's two-member vacation bench suggested that JAL may also consider depositing a larger amount by the next hearing date.

(Source: ET)

During the National Company Law Appellate Tribunal (NCLAT) proceedings, counsel for the lenders highlighted that the insolvency plea against Jaiprakash Associates Ltd (JAL) was filed in 2017, and for the past seven years, the company has stalled the process under the guise of settlement. The lenders voiced their apprehensions about the debt-ridden group's one-time settlement (OTS) proposal, expressing their lack of conviction. Previously, on June 10, 2024, the NCLAT had instructed the banks to review JAL's OTS proposal by June 24. However, during the recent hearing, a two-member vacation bench noted that the banks had not submitted a response to the OTS proposal. The lenders' counsel explained that JAL had issued a last-minute clarification the previous night, necessitating more time for review. After a brief hearing, the NCLAT scheduled the next hearing for July 3 and directed JAL's lenders to consider the OTS and file a reply. This appeal, filed by Sunil Kumar Sharma, a member of the suspended JAL board, challenges the Allahabad bench of the National Company Law Tribunal (NCLT)'s order. On June 3, the NCLT admitted a six-year-old petition filed by ICICI Bank in September 2018, suspended JAL's board, and appointed Bhuvan Madan as interim resolution professional. During the last hearing, JAL's counsel stated the company's willingness to make full payment within 18 weeks if the OTS is accepted by the banks. JAL had proposed an OTS with an upfront payment of Rs 2 billion and the remaining Rs 160 billion to be paid within 18 weeks of acceptance. However, this proposal was dismissed by the Allahabad NCLT, which directed the initiation of the Corporate Insolvency Resolution Process (CIRP) against JAL. The NCLAT's two-member vacation bench suggested that JAL may also consider depositing a larger amount by the next hearing date. (Source: ET)

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