The lenders of Jaiprakash Associates (JAL) are pinning their hopes on an offer from the National Asset Reconstruction Company of India Ltd (NARCL) for stressed assets of the debt-laden company.
In a meeting held on Monday, the lenders also discussed the share transfer deal between ICICI Bank and JAL. “NARCL is currently doing its due diligence for the stressed assets of JAL and banks are waiting for that offer,” a bank official told FE.
“Once the offer is made, bankers will evaluate it and take any decision to accept it or not,” he added. If the offer is less than bankers’ expectations, then lenders will reject it and continue with the current litigation process, he added.
JAL owes nearly 29,000 crore, which includes principal and interest, to 32 banks, including State Bank of India, ICICI Bank, IDBI Bank and others.
The main agenda of the meeting was to discuss the share transfer deal between ICICI Bank and JAL, about which some lenders had raised questions, saying that an individual bank should not enter into an agreement when the consortium is working together to recover dues.
However, the tension between some lenders and ICICI Bank fizzled out after it was made clear that this share transfer was a separate deal between promoters of JAL and the private lender.
“In the meeting, it was made clear the share transfer deal was between promoter entities and ICICI Bank and not with JAL, which removed confusion regarding this issue,” he said, adding that, “now this issue is resolved.”
In its attempt to reduce debt, JAL and its trusts, on November 14, announced the deal to transfer about 189 million shares worth `360 crore to ICICI Bank under a settlement agreement.
The shares transferred were already pledged with the bank, and the move came ahead of the next hearing of the bankruptcy petition on November 30.
After the deal, ICICI Bank’s exposure JAL has declined to 2,640 crore from 3,000 crore earlier. JAL was part of a list of stressed accounts shortlisted by RBI for insolvency proceedings in 2018. The firm is facing proceedings under the Insolvency and Bankruptcy Code initiated by ICICI Bank and State Bank of India at NCLT’s Allahabad bench.