ICICI Bank, SBI seek to exempt Jaiprakash Associates from RBI’s 2nd list

Bankers to the debt-laden Jaiprakash Associates have reached out to the Reserve Bank of India to keep the company out of the second list to be referred to the insolvency proceedings.

ICICI Bank and State Bank of India (SBI) have asked for this special dispensation to remove Jaiprakash Associates from the list.  Jaiprakash Associates, parent of Jaypee Infratech, has a debt of Rs 29,000 crore, according to CNBC-TV18.

Jaypee Infra is currently undergoing insolvency proceedings at the Allahabad bench of NCLT (National Company Law Tribunal) filed by IDBI Bank.

Speaking to Moneycontrol, a senior SBI official confirmed that, "ICICI Bank has taken the lead and informally told the RBI about a restructuring plan under S4A (Scheme for Sustainable Structuring of Stressed Assets) being worked out but required more time from the central bank as the deadline to resolve it out of court will end on December 13."

According to reports, as part of the debt restructuring exercise, the board in its meeting held on October 7 approved the demerger of the undertaking comprising identified movable and immovable assets and liabilities (including estimated debt of Rs 11,834 crore) to be transferred to and vested in the wholly owned subsidiary Jaypee Infrastructure Development.

The Supreme Court has restrained the independent directors and promoters of Jaiprakash Associates and their family members from transferring any personal assets or property without the court’s permission in order to safeguard the homebuyers’ interests.

Jaypee Infratech is one of 12 companies that the RBI first identified in June to be referred to the NCLT under the Insolvency and Bankruptcy Code, while Jaiprakash Associates is among the 28-30 NPA accounts in the second list sent to the banks in August.

Of the 12 NPA cases, 11 are already undergoing the insolvency proceedings (the remaining one account - Era Infra Engineering is being contested as it was already filed for liquidation in the Delhi High Court).

The RBI has asked banks to resolve the 28-30 accounts in the second list out of court before December 13, failing which they will be required to be filed with any of the NCLTs by December end.

Last month, it had reported a standalone net loss of Rs 186.48 crore for the quarter ended September on lower income, as compared with a net loss stood of Rs 781.20 crore in the year-ago period.

The total gross debt of Jaiprakash Associates stood at Rs 67,977.9 crore.