NCLT initiates insolvency against Jaiprakash Associates
ECONOMY & POLICY

NCLT initiates insolvency against Jaiprakash Associates

The National Company Law Tribunal (NCLT) has initiated insolvency proceedings against Jaiprakash Associates Ltd (JAL) following a plea by private lender ICICI Bank. JAL, the flagship company of the Jaypee Group, operates primarily in construction, cement, and hospitality sectors. In recent years, JAL has divested many of its cement plants to alleviate its debt burden. 
The NCLT's Allahabad bench, presided over by Members Praveen Gupta and Ashish Verma, issued the order and appointed an interim resolution professional (IRP) to commence a Corporate Insolvency Resolution Process (CIRP) against JAL. 

Additionally, the tribunal rejected the merger proposal of Jaiprakash Associates Ltd with Jaypee Infrastructure Development Ltd. ICICI Bank had filed an insolvency petition against JAL in September 2018, while the State Bank of India (SBI) also approached the NCLT, claiming a default amount of Rs 68.93 billion as of September 15, 2022. 

JAL was among the 26 major loan defaulters identified by the Reserve Bank of India in August 2017, prompting commercial banks to initiate bankruptcy proceedings. Several subsidiaries of the Jaypee Group, including Jaypee Cement Corporation, are undergoing insolvency proceedings before the NCLT. 

Another JAL entity, Jaypee Infratech, is also in the midst of insolvency proceedings, with the recent decision by the appellate tribunal NCLAT upholding the bid of Mumbai-based Suraksha group. JAL disclosed a default on repayments totalling Rs 17.51 billion in principal amount and Rs 28.65 billion in interest as of April 30. Despite total borrowings of Rs 298.05 billion, the company noted only Rs 46.16 billion as overdue as of April 30, 2024. 

These loans comprise various types such as fund-based working capital, non-fund-based working capital, term loans, and FCCBs (foreign currency convertible bonds). JAL emphasised its efforts to reduce borrowings through divestment of the cement business and on-going restructuring, with plans to transfer Rs 189.55 billion to a proposed Special Purpose Vehicle (SPV) pending approval from all stakeholders and the NCLT. The company reiterated its commitment to significantly reduce borrowings post-divestment and restructuring, leading to almost nil outstanding debt. 

(Source: ET)                                         

The National Company Law Tribunal (NCLT) has initiated insolvency proceedings against Jaiprakash Associates Ltd (JAL) following a plea by private lender ICICI Bank. JAL, the flagship company of the Jaypee Group, operates primarily in construction, cement, and hospitality sectors. In recent years, JAL has divested many of its cement plants to alleviate its debt burden. The NCLT's Allahabad bench, presided over by Members Praveen Gupta and Ashish Verma, issued the order and appointed an interim resolution professional (IRP) to commence a Corporate Insolvency Resolution Process (CIRP) against JAL. Additionally, the tribunal rejected the merger proposal of Jaiprakash Associates Ltd with Jaypee Infrastructure Development Ltd. ICICI Bank had filed an insolvency petition against JAL in September 2018, while the State Bank of India (SBI) also approached the NCLT, claiming a default amount of Rs 68.93 billion as of September 15, 2022. JAL was among the 26 major loan defaulters identified by the Reserve Bank of India in August 2017, prompting commercial banks to initiate bankruptcy proceedings. Several subsidiaries of the Jaypee Group, including Jaypee Cement Corporation, are undergoing insolvency proceedings before the NCLT. Another JAL entity, Jaypee Infratech, is also in the midst of insolvency proceedings, with the recent decision by the appellate tribunal NCLAT upholding the bid of Mumbai-based Suraksha group. JAL disclosed a default on repayments totalling Rs 17.51 billion in principal amount and Rs 28.65 billion in interest as of April 30. Despite total borrowings of Rs 298.05 billion, the company noted only Rs 46.16 billion as overdue as of April 30, 2024. These loans comprise various types such as fund-based working capital, non-fund-based working capital, term loans, and FCCBs (foreign currency convertible bonds). JAL emphasised its efforts to reduce borrowings through divestment of the cement business and on-going restructuring, with plans to transfer Rs 189.55 billion to a proposed Special Purpose Vehicle (SPV) pending approval from all stakeholders and the NCLT. The company reiterated its commitment to significantly reduce borrowings post-divestment and restructuring, leading to almost nil outstanding debt. (Source: ET)                                         

Next Story
Infrastructure Transport

India’s Maha Kumbh of Road Construction

The RAHSTA Forum 2025, held on June 25 at Courtyard by Marriott, Mumbai, delivered powerful insights and dialogue on the future of India’s roads and highways sector. Organised by the FIRST Construction Council, the Forum served as the curtain-raiser to the much-anticipated RAHSTA Expo 2025, set to take place on 3rd and 4th September at the Jio Convention Centre, Mumbai.Union Minister of Roads Transport & Highways Shri Nitin Gadkari, while appreciating the efforts of FIRST Construction Council and ASAPP Info Global Group, commended the awards which recognise excellence across various..

Next Story
Real Estate

Built to Last, Designed to Impress

The construction and interior design industries stand at the confluence of functionality and aesthetics, where innovation powers the creation of enduring structures and inspiring spaces. At the heart of this process are materials and solutions that enable architects, designers, and builders to realise their visions with precision and reliability.Featuring iconic brands such as Fevicol—synonymous with adhesive solutions—Dr. Fixit, a complete waterproofing system renowned for addressing every critical area of construction, and Roff, a specialist in tile-fixing solutions, Pidilite has earned ..

Next Story
Infrastructure Energy

New Push to Cut India’s Air Pollution through Power Sector Reforms

In a significant stride toward environmental sustainability, Cummins India introduced CPCB IV+ compliant gensets to India on July 5, 2023, marking a paradigm shift in the power generation industry. These generators are engineered to adhere to the progressive emission norms set by the Ministry of Environment, Forest, and Climate Change. Being the first sets in the field, they have garnered praise for their remarkable achievements in emissions reduction and cutting-edge technology. Powerica, with its four-decade-long partnership with Cummins India Limited, is dedicated to consistently deliver th..

Advertisement

Advertisement

Subscribe to Our Newsletter

Get daily newsletters around different themes from Construction world.

STAY CONNECTED

Advertisement

Advertisement

Advertisement

Advertisement

Talk to us?