Lenders to debt-laden Jaiprakash Associates Ltd, or Jaypee, will pursue the insolvency route against the company, putting plans to sell the company’s massive debt to government-backed National Asset Reconstruction Co Ltd (NARCL) on the back burner as they hope to fetch better returns for these assets.
Jaypee, which owes a group of 32 creditors led by ICICI Bank nearly ₹30,000 crore, was admitted to the National Company Law Tribunal (NCLT) earlier this week after a six-year delay. NARCL which had offered ₹10,000 crore to buy the debt in March is now not a priority for lenders as they would want to assess the potential recovery from the company which has cement, hotel and real estate assets across the country potentially leading to a higher recovery, people familiar with the lenders’ plans said.
“This account has been stuck for a long time. Finally, some movement is happening, so it’s better to assess what the chances of recovery are. Lenders had considered the NARCL offer because there was no sight on any progress. Now with that happening, lenders will meet soon to take the bankruptcy process forward,” said a person aware of the details.
“The sheer size, scale and diversity of Jaypee’s assets mean that there can be some value expected which can be better than the 85% security receipt that the NARCL offers,” said a second person aware of the plans.
Source: Economic Times