Lenders look to revive restructuring of JP Associates outside IBC

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Lenders to Jaiprakash Associates Ltd are looking at a possible resolution outside the Insolvency and Bankruptcy Code. Sources close to the development confirmed that the consortium of lenders, led by ICICI Bank, are working on a proposal for restructuring under the RBI’s June 7 circular. The objective is to go in for timely restructuring so that lenders can get back some of their dues.

Lenders are expected to submit the proposal to the RBI in the coming months as discussions are still on. “There have been previous instances also when similar discussions were started but did not fructify. Banks are now hoping that this will go through,” said a person familiar with the development, adding that public sector lenders are taking a keen interest.

“As of now, it will be difficult to put a timeline,” he further said.

The proposal, which is still being finalised, is similar to the earlier restructuring proposal. Banks want to divide the sustainable and unsustainable assets of the debt-laden company and then invite bids for strategic sale.

JP Associates is part of the second list of insolvency accounts that the RBI had sent to banks in 2017.

It is the flagship company of Jaypee Group, which is a diversified infrastructure conglomerate with business interests in sectors, including engineering and vonstruction, cement, power, real estate, hospitality and healthcare.

In June 2017, the lenders had approved a restructuring plan under which its land parcels would be divided and transferred to a special purpose vehicle and sold off to investors on a long-term basis payment to reduce its debt. The proposal was also sent to the RBI for approval.

In September 2018, ICICI Bank had also filed an insolvency petition against JP Associates before the Allahabad Bench of the National Company Law Tribunal.

The company’s total debt is estimated at over ₹18,000 crore.

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