LI Network
Published on: November 07, 2023 at 11:32 IST
Jaiprakash Associates, the flagship company of the crisis-ridden Jaypee Group, disclosed on Monday that it has defaulted on loans amounting to Rs 4,258 crore, encompassing both principal and interest payments.
In a regulatory filing, Jaiprakash Associates Ltd (JAL) revealed that the defaults occurred on October 31, with a principal amount of Rs 1,733 crore and interest of Rs 2,525 crore remaining unpaid.
These loans are associated with various banks and comprise fund-based working capital, non-fund-based working capital, term loans, and FCCB (foreign currency convertible bonds).
JAL clarified, “The total borrowing (including interest) of the company is Rs 29,272 crore, repayable by 2037, against which only Rs 4,258 crore is overdue as of October 31, 2023.”
Furthermore, out of the total borrowing, Rs 18,682 crore will be reduced upon the transfer to the proposed Special Purpose Vehicle (SPV), a Scheme of Arrangement that has received approval from all stakeholders but is pending sanction by the National Company Law Tribunal (NCLT). The company emphasized that the entire loan is undergoing restructuring.
The firm is actively working to reduce its borrowings and anticipates a significant reduction upon the proposed divestment of its cement business and the completion of the restructuring plan. Despite these financial challenges, JAL remains committed to addressing its outstanding obligations.
Additionally, JAL mentioned that ICICI Bank had initiated proceedings at the NCLT Allahabad under the direction of the Reserve Bank of India (RBI) pursuant to Section 7 of the Insolvency and Bankruptcy Code (IBC) 2016 against the company, which JAL has contested.
The matter is currently pending and is set to be decided concurrently with the Scheme of Arrangement for the transfer of real estate to the SPV, pending NCLT approval.
In the past, ICICI Bank and State Bank of India (SBI) have initiated insolvency proceedings against JAL due to default in loan repayments. SBI, India’s largest lender, has claimed a total default of Rs 6,893.15 crore as of September 15, 2022.
Earlier this year, JAL and its group companies had announced the sale of their remaining cement assets to Dalmia Bharat Ltd, marking their exit from the sector as part of a strategic debt reduction plan. As part of previous debt resolution efforts, JAL had already divested more than 20 million tonnes per annum of cement capacity to Aditya Birla group firm UltraTech Cement between 2014 and 2017.
The ongoing financial challenges faced by JAL are closely tied to its erstwhile subsidiary, Jaypee Infratech Ltd (JIL). A Mumbai-based realty firm, the Suraksha Group, had obtained NCLT approval in March to acquire JIL and complete the construction of approximately 20,000 apartments in Noida.
However, several parties have lodged appeals with the National Company Law Appellate Tribunal (NCLAT) against the NCLT’s decision, further complicating the resolution process.