 "jaypee")
The National Company Law Tribunal (NCLT) on Monday directed to initiate insolvency proceedings against debt-ridden Jaiprakash Associates Ltd, admitting the plea filed by private lender ICICI Bank.
Jaiprakash Associates Ltd (JAL), which is the flagship firm of Jaypee Group, is mainly into construction, cement and hospitality businesses. JAL has sold many cement plants in the last few years to reduce its debt.
A two-member bench at NCLT, Allahabad, comprising Members Praveen Gupta and Ashish Verma pronounced the order on Monday afternoon, said lawyers connected with the matter.
The tribunal has also appointed an interim resolution professional (IRP) and directed the initiation of a Corporate Insolvency Resolution Process (CIRP) against JAL, they said.
The Allahabad bench of the tribunal has also dismissed the merger of Jaiprakash Associates Ltd with Jaypee Infrastructure Development Ltd.
A detailed order is yet to be uploaded to the NCLT website.
In September 2018, leading private sector lender ICICI Bank filed an insolvency petition against JAL under section 7 of IBC. Besides, the country's biggest lender SBI had approached NCLT against JAL, claiming a total default of Rs 6,893.15 crore as of September 15, 2022.
JAL was part of the Reserve Bank of India's list of 26 big loan defaulters to commercial banks for initiating bankruptcy proceedings in August 2017.
Several Jaypee Group companies namely Jaypee Cement Corporation are facing insolvency proceedings before NCLT. Its other firm Jaypee Infratech is also in the middle of insolvency proceedings, in which last week the appellate tribunal NCLAT upheld the bid of Mumbai-based Suraksha group.
Last month, the JAL had informed that the company had on April 30, defaulted on repayments of a principal amount of Rs 1,751 crore and interest of Rs 2,865 crore.
"Total borrowing (including interest) of the company is Rs 29,805 crore, repayable by 2037, against which only Rs 4,616 crore is overdue as of April 30, 2024," JAL had said.
The loans pertained to various banks, and the nature of the obligation is fund-based working capital, non-fund-based working capital, term loans and FCCBs (foreign currency convertible bonds).
Out of the total borrowing of Rs 29,805 crore, the JAL had said that Rs 18,955 crore would be transferred to the proposed Special Purpose Vehicle.
For this, a Scheme of Arrangement duly approved by all the stakeholders is pending for sanction of the National Company Law Tribunal. The entire loan in any case is under restructuring, the company said.
"As a responsible borrower, the company has been taking tangible steps to reduce the borrowings. After the proposed divestment of the cement business and the restructuring are taken into consideration, the borrowing will get almost to nil," JAL had said last month.
(Only the headline and picture of this report may have been reworked by the Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)
