Jaypee Group's Flagship Firm Jaiprakash Associates Defaults On Rs 4,161 Crore Loan Due On March 31

In an exchange filing on Saturday, Jaiprakash Associates Ltd announced that it had defaulted on the repayment of loans amounting to Rs 4,161 crore, which were due on March 31.

The company, which is the flagship entity of the infrastructure-focused Jaypee Group, further disclosed that it has borrowings amounting to Rs 29,396 crore that are due for repayment by 2037.

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Jaiprakash Associates Ltd (JAL), in an exchange filing on Saturday, announced that it had defaulted on the repayment of loans amounting to Rs 4,161 crore, which were due on March 31. The company, which is the flagship entity of the infrastructure-focused Jaypee Group, further disclosed that it has borrowings amounting to Rs 29,396 crore that are due for repayment by 2037.

“Post the proposed divestment of cement business and the restructuring under consideration, the borrowing will get almost to nil upon implementation of revised restructuring plan,” the company said.

Jaiparakash Associates said, "The total borrowing (including interest) of the Company is Rs 29,396 crore, repayable by 2037, against which only Rs 4,161 crore is overdue as on March 31, 2023. Out of the said borrowing of Rs 29,396 Crore, Rs.18,051 crore will get further reduced on transfer to the proposed Special Purpose Vehicle (SPV) for which the Scheme of Arrangement duly approved by all the stakeholders, is pending sanction of NClT. The entire loan is in any case under restructuring."

As a responsible borrower, the Company has been taking tangible steps to reduce the borrowings, the company further said. 

The exchange filing also noted that the Company under the direction of the Supreme Court had deposited a sum of Rs 750 crore in the matter relating to litigation of home-buyers with Jaypeelnfratech Limited (JIL), banks of Jaiparakash Associates were contesting that the amount so deposited by the Jaiparakash Associates of Rs 750 crore and interest accrued thereon to be refunded to Jaiparakash Associates to enable Jaiparakash Associates to meet its obligations with its lenders.

Supreme Court in its order dated March 25, 2021, has finally decided on the issue relating to Rs 750 crore (with accrued interest) deposited by Jaiprakash Associates Limited in favor of the Company.

Earlier this year in January, Jaiprakash Associates defaulted on loans of Rs 4,059 crore, comprising both the principal and interest amount. 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 FCCB (foreign currency convertible bonds).

In September 2018, ICICI Bank filed an insolvency petition against JAL but the matter is still pending before the Allahabad bench of the National Company Law Tribunal (NCLT).

The country's biggest lender SBI had in September last year moved the NCLT against JAL, claiming a total default of Rs 6,893.15 crore as on September 15, 2022.