Lenders of bankrupt Jaiprakash Associates to meet Friday; challenge process among 5 bidders likely

The Committee of Creditors (CoC) meeting is scheduled on September 5.

Lenders of Jaiprakash Associates Ltd (JAL), which is facing insolvency proceedings, will meet on Friday to discuss ’challenge process’ to be conducted by the resolution professional among five bidders to maximise the value of the assets of the debt-ridden company.

The Committee of Creditors (CoC) meeting is scheduled on September 5. Adani Group, Dalmia Bharat, Vedanta Group, Jindal Power and PNC Infratech have submitted bids to acquire JAL. According to sources, the CoC during its meeting held on August 22, decided to carry out further commercial negotiations with each of the Resolution Applicants to maximizing the value of assets of JAL. To achieve this objective, a note was circulated to conduct the challenge process, which means the bidding process proposed to be conducted to identify the highest committed financial proposal on NPV basis for secured financial creditors.

The challenge process is likely to be held on Friday among these bidders. The minimum bid value has been kept at Rs 12,000 crore, sources said. In this challenge process, wherein a bidder (original bidder) makes an unsolicited bid to the auctioneer. Once approved, the auctioneer then seeks counter proposals against the original bidder’s proposal and chooses the best amongst all options (including the original bid). After this challenge process, the five bidders will have to submit the final signed resolution plans, which must be compliant with the IBC and the CIRP Regulations. JAL was admitted into the corporate insolvency resolution process (CIRP) through the National Company Law Tribunal, Allahabad Bench, order dated June 3, 2024.

It was taken to insolvency proceedings after the conglomerate defaulted on the payment of loans. Creditors are claiming a staggering Rs 57,185 crore. The National Asset Reconstruction Company Ltd (NARCL) leads the list of claimants after acquiring the stressed JAL loans from a consortium of lenders headed by the State Bank of India. JAL has major real estate projects like Jaypee Greens in Greater Noida, a part of Jaypee Greens Wishtown in Noida (both on the outskirts of the national capital), and the Jaypee International Sports City, strategically located near the upcoming Jewar International Airport.

It also has three commercial/industrial office spaces in Delhi-NCR, while its hotel division has five properties in Delhi-NCR, Mussoorie, and Agra. JAL has four cement plants in Madhya Pradesh and Uttar Pradesh, and a few leased limestone mines in Madhya Pradesh. The cement plants, however, are non-operational. It also has investments in subsidiaries, including Jaiprakash Power Ventures Ltd, Yamuna Expressway Tolling Ltd, Jaypee Infrastructure Development Ltd, and several other companies.