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)