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Jaiprakash lenders await RBI nod to proceed with NARCL offer
KV Prasad Jun 13, 2022, 06:35 AM IST (Published)
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Summary
Jaiprakash Associates had an outstanding debt of ₹28,870 crores, inclusive of interest, as of March 2024, as per the company’s exchange disclosures. Out of this, about ₹19,000 crores is the principal outstanding, and the rest of the interest accrued over the years.
Jaiprakash Associates’ lead lender, ICICI Bank, has approached the regulator for a green flag to go ahead with the sale of the account to the National Asset Reconstruction Company Ltd (NARCL), multiple people aware of the matter told CNBC-TV18.
CNBC-TV18 had reported earlier that NARCL had submitted a binding bid for ₹10,000 crores to acquire the debt of Jaiprakash Associates Ltd from banks, and given that the Reserve Bank of India (RBI) had previously directed banks to resolve the company’s debt via the National Company Law Tribunal (NCLT), banks may need the regulator’s blessing to accept the offer from NARCL.
The lead banks to Jaiprakash Associates have now submitted an official request to the RBI for its sign-off on the NARCL deal, said three people aware of the matter. Once the RBI gives the go-ahead, banks will start the process by inviting counter bids under the Swiss Challenge mechanism using NARCL’s bid as the base offer, it is understood.
Meanwhile, lenders have already started deliberating on the next steps. At a recently held joint lenders meeting, an initial discussion was held on distribution methodology, assuming NARCL’s offer were to be accepted, said two people directly aware of the matter.
While some lenders like ICICI Bank, were of the view that the distribution should be on the basis of charges held by banks on the company’s assets, others argued for a pari-passu distribution of proceeds, said the people quoted earlier on the condition of anonymity.
Jaiprakash Associates had an outstanding debt of ₹28,870 crores, inclusive of interest, as of March 2024, as per the company’s exchange disclosures. Out of this, about ₹19,000 crores is the principal outstanding, and the rest of the interest accrued over the years, as per a banking executive CNBC-TV18 spoke to.
ICICI Bank, the lead banker to Jaiprakash Associates, under the direction of the RBI, had filed an insolvency and bankruptcy plea against the company in the NCLT in 2018.
Subsequently, the State Bank of India (SBI) had also moved the tribunal to initiate insolvency proceedings against the company in 2022, but the court is yet to rule on the matter.
ICICI Bank, SBI, and IDBI Bank are among the 22 lenders that have exposure to JAL.
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