JSW, Adani Eyes Stake in Jaypee Group as Company Nears Insolvency

As Jaiprakash Gaur-chaired Jaiprakash Associates (JAL) is gearing up for insolvency proceedings, suitors including Adani Group, JSW, Jindal Power, Dalmia Bharat and Vedanta have lined up to acquire stakes. The bidders, excluding the Adani Group, have already submitted expressions of interest (EOIs) to bid for the Noida-headquartered conglomerate, the Economic Times reported, citing sources. 

EOI is a document submitted by a prospective buyer interested in purchasing a stake in a business in various industries. However, EOI is considered just as an intent of parties to bid and is not a final bid proposal. 

The final date to submit an EoI for buying Jaypee Group’s flagship company, which is reportedly valued at Rs 17,300 crore, is March 25. The group has its businesses across different industries, including engineering, construction, power, fertilizer, healthcare and real estate. Its assets include cement plants with an annual capacity of 10 million tonnes and engineering, procurement and construction (EPC) venture with lucrative construction contracts.

Jaypee Group’s Financial Trouble 

Jaypee Group’s flagship firm was admitted for insolvency in June last year under the Insolvency and Bankruptcy Code, following a move by ICICI bank against JAL after it defaulted on Rs 1,269 crore of loans. The loans were given to JAL by ICICI between 2011 and 2015. Apart from ICICI bank, the conglomerate owes to 31 creditors including State Bank of India, Punjab National Bank and IDBI Bank. 

To escape the insolvency proceedings, the company cited delayed government approvals, time-consuming land acquisition litigation for the Yamuna Expressway project and policy uncertainty as reasons behind debt repayment. 

However, unconvinced by the reasons and efforts, the National Company Law Tribunal (NCLT) Allahabad bench ordered to proceed with the insolvency process under a single resolution plan for the entire company. Prior to this, the conglomerate proposed that there should be separate bidding process for different businesses under the Jaypee Group.