Jaypee Group's Flagship JP Associates Defaults On Loans Worth Rs 3,956 Crore

In a regulatory filing on Tuesday, Jaiprakash Associates Ltd (JAL) informed that the company on April 30 defaulted on repayments of a principal amount of Rs 1,642 crore and interest of Rs 2,314 crore.

ICICI Bank has taken JAL to the NCLT Allahabad under section 7 of the Insolvency and Bankruptcy Code 2016, following RBI's direction. JAL has challenged this action.

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Jaiprakash Associates Ltd (JAL), the flagship company of Jaypee Group, has defaulted on loans worth Rs 3,956 crore, which includes both principal and interest amounts. In a regulatory filing on Tuesday, Jaiprakash Associates Ltd (JAL) informed that the company on April 30 defaulted on repayments of a principal amount of Rs 1,642 crore and interest of Rs 2,314 crore.

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), the company said. 

JAL said, "The total borrowing (including interest) of the company is Rs 29,277 crore, repayable by 2037, against which only Rs 3,956 crore is overdue as on April 30, 2023".

The company said that once the scheme of arrangement, which has been approved by all stakeholders, is sanctioned by the NCLT, the proposed special purpose vehicle (SPV) will take over and the total borrowing will be reduced by Rs 18,106 crore.

"The entire loan is in any case under restructuring," it added.

"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," it said.

ICICI Bank has taken JAL to the NCLT Allahabad under section 7 of the Insolvency and Bankruptcy Code 2016, following RBI's direction. JAL has challenged this action.

"The matter is pending to be decided simultaneously with the Scheme of Arrangement for transfer of real estate to the SPV to be sanctioned by the NCLT," the filing said.

According to a PTI report, ICICI Bank filed for insolvency against JAL in September 2018, while SBI moved to the NCLT against JAL for defaulting on a total of Rs 6,893.15 crore on September 15, 2022.

As part of its debt reduction strategy, JAL and its group companies recently sold their remaining cement assets to Dalmia Bharat Ltd for an enterprise value of Rs 5,666 crore and have exited the sector, the report noted. 

As a part of its debt resolution plan, JAL sold its cement capacity of over 20 million tonnes per annum to UltraTech Cement, a firm belonging to the Aditya Birla group, between 2014 and 2017.

Earlier, the NCLT had approved the bid of the Suraksha Group, a Mumbai-based realty firm, to acquire Jaypee Infratech Ltd (JIL) and finish construction on roughly 20,000 flats in Noida. However, several parties have challenged the NCLT's decision and have appealed to the National Company Law Appellate Tribunal (NCLAT).