In a bid to scale back its debt burden, distressed builder Jaiprakash Associates has entered into an settlement with ICICI Financial institution to switch Rs 18.9 lakh crore of fairness to the lender, which has been pledged with the financial institution. This can lead to a restoration of round Rs 366 crore for the financial institution, considering the final closing worth of its shares.
“…With an intention to offer impetus to the corporate’s ongoing efforts to scale back its debt, the corporate, together with the trusts holding 18,93,16,992 fairness shares of the corporate, has entered right into a settlement settlement with ICICI Financial institution (the lender),” JB stated in a inventory change submitting. : “To switch the stated shares to the lender.”
“The worth/deeming of the stated shares is arrived at based mostly on the closing worth of the Nationwide Inventory Change of India Restricted on the day previous the precise switch of shares to the lender’s demat account,” the inventory change notification stated.
On the closing worth of Rs 19.35 lakh share worth of JP Associates, these shares will probably be value Rs 366 crore. Consequently, this deal will lead to a restoration of Rs 366 crore for ICICI Financial institution. The non-public sector lender has an publicity of Rs 3,000 crore to JP Associates – for which the financial institution has absolutely allotted provision.
On November 6, Jaypee Group’s flagship firm, JP Associates, stated it had defaulted on loans as of October 31, totaling Rs 4,258 crore – together with mortgage principal and curiosity.
The corporate’s whole borrowing (together with curiosity) stands at Rs 29,272 crore, to be repaid by 2037, towards simply Rs 4,258 crore in arrears as of 31.10.2023, JB stated in a submitting to the inventory exchanges. JB’s lenders included State Financial institution of India, Punjab Nationwide Financial institution, Financial institution of Baroda, Canara Financial institution, ICICI Financial institution and Axis Financial institution, amongst others. The loans have been fund-based working capital, non-fund-based working capital, time period loans and FCCB. JB stated it was taking concrete steps to scale back debt.
“As a accountable borrower, the corporate has taken concrete steps to scale back borrowings. Following the proposed liquidation of the cement enterprise and the restructuring into consideration, borrowing will attain nearly zero upon implementation of the revised restructuring plan,” the corporate stated in a press release to the inventory change on November 6.
This improvement comes amid lenders beginning insolvency proceedings towards the development firm. In September, the State Financial institution of India (SBI), the nation’s largest financial institution, moved the Nationwide Firm Regulation Tribunal to provoke insolvency proceedings towards the corporate. ICICI Financial institution had additionally filed an analogous petition in September 2018.
(Tags for translation)NCLT