In a setback for Jaiprakash Associates, the Allahabad bench of the National Company Law Tribunal (NCLT) has admitted ICICI Bank and SBI's insolvency plea against the company.
ICICI Bank has claimed over Rs 3,000 crore to be recovered, including interest, in its plea. The first insolvency plea was filed by ICICI Bank before the tribunal in 2018, and later, SBI too had filed a plea before NCLT in 2022, to expedite the process.
Jaiprakash Associates has a principal debt of Rs 17,700 crore and a total outstanding debt of Rs 29,361 crore including interest. In all, 22 lenders have exposure to JP Associates' debt.
The company has been selling its cement plants to reduce debt, however, CNBC-TV18 reports that the fate of the cement deal with Dalmia Cement is unclear as the transaction has yet to be concluded. In December 2022, Jaiprakash Associates (JAL) and Dalmia Bharat had signed a framework for the acquisition of JAL's cement, clinker and power plants for an enterprise value of Rs 5,666 crore.
National Asset Reconstruction Company of India (NARCL) had submitted a Rs 10,000 crore binding offer to acquire JAL's debt earlier in March-April 2024, but the valuation was less than satisfactory for lenders who were seeking a better offer, as per some news reports, thus leading to the matter approaching the tribunal.
To reduce its debt, JAL had announced a deal to transfer about shares worth Rs 360 crore to ICICI Bank under a settlement agreement, last year in November.
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