Adani wins lenders’ nod to take over debt-laden Jaiprakash Associate for Rs 14,535 crore
Sources said lenders preferred Adani's plan primarily because it offered a higher upfront payment compared to competing proposals
New Delhi: The Adani group has won the majority of lenders’ votes for the takeover of debt-laden Jaiprakash Associates, as its Rs 14,535-crore acquisition proposal included a higher upfront payment than rival bidders, sources said.
A Committee of Creditors voted on resolution plans (acquisition proposals) submitted by suitors, including Adani Group, Vedanta Ltd and Dalmia Cement (Bharat). Adani received the maximum 89 per cent of the votes from creditors, followed by Dalmia Cement (Bharat) and the Vedanta Group, they added.
National Asset Reconstruction Company Ltd (NARCL) had the biggest say in the process as it controls about 86 per cent of the Committee of Creditors’ (CoC) voting share. A small group of lenders, including State Bank of India and ICICI Bank, who together account for less than 3 per cent of CoC’s votes, abstained from voting.
Sources said lenders preferred Adani’s plan primarily because it offered a significantly higher upfront payment compared to competing proposals. The ports-to-energy conglomerate has proposed a total plan value (TPV) of Rs 14,535 crore, including Rs 6,005 crore upfront and another Rs 6,726 crore payable after two years.
In net present value terms, the offer is estimated at Rs 12,000 crore. Vedanta offered Rs 3,800 crore upfront payment and Rs 12,400 crore in deferred payments over five years, taking the TPV of Rs 16,726 crore.
When contacted, a Vedanta spokesperson said, “Vedanta is a growth-oriented company, always looking for opportunities and synergy. Our approach remains disciplined, focused on value creation and long-term growth.”
Jaiprakash Associates (JAL), which has high-quality assets and business interests spanning real estate, cement manufacturing, hospitality, power and engineering & construction, was admitted to the Corporate Insolvency Resolution Process (CIRP) in June last year after it defaulted on payments of loans aggregating Rs 57,185 crore.
JAL announced in June that it had received five bids, along with earnest money, with Vedanta, Adani Enterprises, Dalmia Cement, Jindal Power, and PNC Infratech making the bids. In September, the CoC conducted an auction under the Swiss challenge process.
JAL has major real estate projects like Jaypee Greens in Greater Noida, a part of Jaypee Greens Wishtown in Noida (both on the outskirts of the national capital), and the Jaypee International Sports City, strategically located near the upcoming Jewar International Airport.
It also has three commercial/industrial office spaces in Delhi-NCR, while its hotel division has five properties in Delhi-NCR, Mussoorie, and Agra. JAL has four cement plants in Madhya Pradesh and Uttar Pradesh, and a few leased limestone mines in Madhya Pradesh. It also has investments in subsidiaries, including Jaiprakash Power Ventures Ltd, Yamuna Expressway Tolling Ltd, Jaypee Infrastructure Development Ltd, and several other companies.
Sources said the CoC evaluated the resolution plans on the basis of the evaluation matrix. The resolution plan of Adani Enterprise Ltd got the highest score, followed by Dalmia Cement (Bharat) and Vedanta Ltd.
It is understood that the payments in Dalmia’s plans are contingent upon the Supreme Court’s judgement on the pending matter between JAL and Yamuna Expressway Industrial Development Authority (YEIDA). Adani Group is offering the payment to lenders within two years, while Vedanta is offering back-ended payments over the next five years.
In April this year, 25 companies showed interest in acquiring JAL.
Financial stress and insolvency impacted JAL’s businesses, including cement manufacturing units and EPC projects of national importance, such as the Pakal Dul Dam project in Jammu & Kashmir and, Srisailam Canal project in Andhra Pradesh.
