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Jaypee Group's main company, Jaiprakash Associates, which is currently facing a crisis, has failed to pay back a total of Rs 3,961 crore in loans, which include both the principal and interest amounts. According to a regulatory disclosure, Jaiprakash Associates Ltd. (JAL) has reported a failure to pay back the principal sum of Rs 1,600 crore and interest worth Rs 2,361 crore, which happened on May 31.
The funds borrowed were from numerous banks and comprised different forms of financial obligations, including working capital (both fund-based and non-fund-based), term loans, and FCCBs (foreign currency convertible bonds). JAL stated that the company has a borrowing amount of Rs 29,429 crore that includes interest and needs to be repaid by 2037. As of May 31, 2023, only Rs 3,961 crore of the total borrowing was overdue.
The company has stated that a sum of Rs 18,231 crore out of the overall borrowing of Rs 29,429 crore will be decreased upon transfer to the proposed Special Purpose Vehicle (SPV). The scheme of arrangement has received approval from all stakeholders and is currently awaiting approval from the National Company Law Tribunal (NCLT). It stated that, without a doubt, the whole loan is undergoing restructuring. The organization reported that it has been implementing effective measures to lower its debt.
According to the statement, once the plan to restructure and divest the cement business is implemented, the amount of money borrowed is expected to decrease significantly and almost reach zero. JAL has stated that, under the guidance of the RBI, ICICI Bank has initiated legal proceedings against the company by filing a case with the NCLT Allahabad under Section 7 of the Insolvency and Bankruptcy Code 2016. The decision has been challenged.
The issue is yet to be resolved, along with the approval of the transfer of property to the SPV as part of the Scheme of Arrangement, which is pending approval from the NCLT, according to the statement. JAL was subjected to an insolvency petition by ICICI Bank in September 2018. State Bank of India, the largest lender in the country, had filed a case against JAL in the NCLT stating a complete non-payment of Rs 6,893.15 crore as of September 15, 2022.
JAL and its affiliated companies have made known the disposal of their remaining cement assets to Dalmia Bharat Ltd., with a total enterprise value of Rs 5,666 crore. This move was part of their plan to decrease debt and withdraw from the industry. Previously, JAL had divested over 20 million metric tonnes of annual cement capacity to UltraTech Cement, which is a subsidiary of Aditya Birla Group, as a part of its debt resolution efforts from 2014–2017.
The Suraksha Group, a Mumbai-based real estate company, was able to gain approval from the NCLT in March to take over Jaypee Infratech Ltd. (JIL), a former subsidiary. The acquisition will enable the company to finish constructing approximately 20,000 apartments in Noida. Nevertheless, numerous entities have sought the intervention of the NCLAT regarding the NCLT's ruling.
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