The bankruptcy court in Allahabad admitted Jaiprakash Associates Ltd (JAL) for corporate insolvency almost six years after ICICI Bank filed an application.
The tribunal, while admitting the company under the Corporate Insolvency Resolution Process (CIRP) has also appointed Bhuvan Madan as interim resolution professional (IRP) of the company, said two people aware of the development.
The private sector lender had approached the tribunal after the company failed to pay its dues of about Rs 3,000 crore.
On Monday, the division bench of judicial member Praveen Gupta and a technical member Ashish Verma admitted the company in an oral order. The detailed order was not available till the time of filing the story.
The development is expected to put a spanner in the efforts of the company to execute a deal with Dalmia Bharat Group, where the latter was expected to acquire Jaiprakash Associates’ cement, clinker and power units at the enterprise value of Rs 5,666 crore.
In the Allahabad bench of the National Company Law Tribunal, senior counsel Amit Saxena along with Madhav Kanoria of law firm Cyril Amarchand Mangaldas (CAM) is appearing for the lender while, Jaiprakash Associates is being represented by senior advocate RP Agarwal in the case.
Last month, ET reported that the company’s lenders led by the State Bank of India (SBI) have sought approval from the Reserve Bank of India (RBI) to sell the Rs 18,000 crore debt of the company to the National Asset Reconstruction Company of India (NARCL).
Lenders are seeking approval because in 2017, soon after the Insolvency and Bankruptcy Code (IBC) was enacted, the RBI directed banks to refer 28 companies, including JAL, for debt resolution under the Act. The company was on the second list of 28 accounts referred by the RBI for resolution under the IBC.
JAL is the flagship company of the Manoj Gaur-promoted Jaypee Group with an asset portfolio comprising cement, hospitality, real estate, fertiliser and construction businesses. In fiscal 2023, NARCL acquired 62%, or Rs 9,234 crore, of Jaypee Infratech’s debt, offering lenders a 39% recovery following an uncontested Swiss challenge auction.
The ET, in its story, had reported that NARCL had offered 15% as cash and the balance as securities receipts. This implies that NARCL will have to offer a cash component of Rs 1,500 crore, while the balance of Rs 8,500 crore would be security receipts, which would be redeemed as and when the ARC recovers the dues.
