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Jaiprakash Associates, a flagship firm of the crisis-hit Jaypee Group, has defaulted on loans of Rs 4,161 crore, including principal and interest amount. The company has informed in a regulatory filing that it defaulted on repayments of a principal amount of Rs 1,653 crore and interest of Rs 2,508 crore on March 31. 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 foreign currency convertible bonds.
According to Jaiprakash Associates, the total borrowing of the company is Rs 29,396 crore, repayable by 2037, out of which only Rs 4,161 crore is overdue as of March 31, 2023. The company has been taking tangible steps to reduce the borrowings and post the proposed divestment of the cement business and the restructuring under consideration, the borrowing will get almost to nil upon implementation of the revised restructuring plan.
However, ICICI Bank, on the direction of the RBI, has approached the National Company Law Tribunal (NCLT) Allahabad against the company under the Insolvency and Bankruptcy Code 2016. The matter is pending to be decided simultaneously with the scheme of arrangement for the transfer of real estate to the special purpose vehicle to be sanctioned by the NCLT. In September 2018, ICICI Bank filed an insolvency petition against JAL, and the country's biggest lender, SBI, has also moved the NCLT against JAL, claiming a total default of Rs 6,893.15 crore as of September 15, 2022.
Jaiprakash Associates said that the entire loan is under restructuring, and it has been taking steps to reduce borrowings. The company recently announced the sale of its remaining cement assets to Dalmia Bharat Ltd for an enterprise value of Rs 5,666 crore and exit from the sector as part of its strategy to reduce debt. Earlier, as part of its debt resolution exercise, JAL had sold more than 20 million tonnes per annum cement capacity to Aditya Birla group firm UltraTech Cement between 2014 and 2017.
Mumbai-based realty firm Suraksha Group has recently got approval from the NCLT for its bid to acquire its erstwhile subsidiary, Jaypee Infratech Ltd (JIL) and complete around 20,000 apartments in Noida. The company said that Rs 18,051 crore will get further reduced on transfer to the proposed special purpose vehicle for which the scheme of arrangement duly approved by all the stakeholders is pending sanction of the NCLT.
The situation is critical for Jaiprakash Associates, as the company is facing insolvency proceedings from multiple banks, and its financial health has been deteriorating for some time. The company's debt reduction strategy will be crucial in determining its future prospects.
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