The lenders of Jaiprakash Associates (JAL) are gearing up to taking the debt-laden company to National Company Law Tribunal (NCLT). This move comes after they were unable to garner a satisfactory valuation for the stressed assets of JAL, the flagship company of the Jaypee Group, from the National Asset Reconstruction Company of India (NARCL).
“The initial offer made by NARCL has fallen short of lenders’ expectations so they have sought a better offer,” a senior bank official told FE. “If the revised offer once again falls short of expectations, the lenders will be left with no choice but to take this case to NCLT,” he added.
JAL owes nearly Rs 29,000 crore, which includes principal and interest, to 32 banks, including State Bank of India, ICICI Bank, IDBI Bank and others. Bankers are reluctant to move JAL to NCLT as they had expected higher recovery from NARCL.
“Going by the past record, the actual amount of recovery from NCLT is not very encouraging. Bankers prefer NARCL over NCLT but the case is going on for a long time,” he added.
Bankers say that the resolution process is time bound in NCLT but the recovery amount is less.
JAL was part of a list of stressed accounts shortlisted by the Reserve Bank of India (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.
In its attempt to reduce debt, JAL and its trusts, on November 14 last year, announced the deal to transfer about 189 million shares worth Rs 360 crore to ICICI Bank under a settlement agreement. The shares transferred were already pledged with the bank. After the deal, ICICI Bank’s exposure JAL has declined to Rs 2,640 crore from Rs 3,000 crore earlier.