Jaiprakash Associates has called a board meeting on July 4 to review the progress of company’s divestment plans after the Joint Lenders Forum agreed for invocation of Strategic Debt Restructing (SDR) or swapping loans for equity.
The infrastructure conglomerate may effectively lose control of their flagship company if the banks’ move succeeds.
The forum has taken June 28, 2016 as reference date for the SDR scheme, according to a stock exchange filing by the company.
UltraTech dealThe move may further hamper a Rs.15,900 crore Jaypee-UltraTech cement deal from going through as bankers after taking control of the company may call for fresh bids, said sources familiar with the development.
“The Joint Lenders Forum meeting held to review the progress made so far on the Corrective Action Plan, approved by the lenders in January, 2015 has agreed for invocation of Strategic Debt Restructuring (SDR) taking June 28, 2016 as reference date, subject to approval of lenders.
Further, the Company has informed that a meeting of the Board of Directors of the Company is scheduled at a short notice on July 04, 2016,” according to the filing.
The restructuring allows banks to convert their loans into equity, making them the effective promoters of the company.
Early this year, UltraTech and Jaiprakash Associates had signed an agreement for the sale the cement division, which has capacity of 21.2 million tonne in factories located across five states for Rs.15,900 crore
Crucial saleJaiprakash Associates, the flagship of the Jaypee Group, owes over Rs.30,000 crore to a consortium of lenders led by ICICI Bank and the sale of its cement business is very crucial for the Manoj Gaur-led family to continue in business. As of 31 March, Jaiprakash Associates had consolidated debt of Rs.58,250 crore.
UltraTech on July 1 said that the agreement to buy Jaiprakash's cement assets was valid and is under implementation.
Jaiprakash Associates shares on Friday fell 3.16 per cent to Rs.8.59, valuing the debt-laden firm at Rs.2,089 crore or less than 4 per cent of its total consolidated debt.
The trading window for Jaiprakash shares will remain closed from 9.00 PM on July 01, 2016 to July 06, 2016 for employees, directors, key managerial personnel and designated persons and their immediate relatives, as per SEBI’s insider trading regulations.
