JPVL gets shareholders’ nod to issue shares worth Rs 4,000 crore to lenders

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Published: September 21, 2019 8:21:35 PM

The Samadhan envisages that there would be no change of management and the debt of the power companies will be bifurcated into sustainable and unsustainable debt.

The company has also got shareholders’ nod to issue long-term financial instruments of Rs 400 crore against the outstanding debt of JSW Energy at a later stage, which would be fully redeemable from the cash flow of the company.

Debt-laden Jaiprakash Power Ventures has got shareholders’ approval to issue preference shares worth Rs 4,000 crore to its lenders. The shareholders approved the proposal with requisite majority at the annual general meeting (AGM) held on September 20, a BSE filing said. The firm’s board on August 31, 2018, had approved the offer and issue of 0.01 per cent cumulative compulsory convertible preference shares (CCPs) aggregating up to Rs 4,000 crore in one or more tranche on preferential basis to lenders.

According to the notice for the AGM, the company had submitted its proposal for deep re-structuring of loan facilities under Scheme of Assets Management and Debt Change Structure or Samadhan (initiated by the RBI for stressed assets). The Samadhan envisages that there would be no change of management and the debt of the power companies will be bifurcated into sustainable and unsustainable debt. The company had said that the proposal had been favourably considered by the banks/financial institutions and a framework agreement was signed on April 18, 2019.

The company has also got shareholders’ nod to issue long-term financial instruments of Rs 400 crore against the outstanding debt of JSW Energy at a later stage, which would be fully redeemable from the cash flow of the company. The company has also got shareholders’ approval to convert Rs 352 crore debt of JSW Energy into equity shares of Rs 10 each under the proposal. The company had taken a term loan of Rs 1,000 crore from Axis Bank Ltd, which disbursed the loan to the Company on the basis of corporate guarantee given by JSW Energy.

Later on JSW Energy repaid the loan amount to Axis Bank on behalf of the company. Against the loan, an amount of Rs 752 crore was outstanding to JSW Energy as on March 31, 2019.

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