The financially troubled builder Jaiprakash Associates made an agreement with ICICI Bank to give the lender 18.9 crore shares that were pledged to the bank in an effort to lessen its debt load.
In light of the most recent closing price of its shares, this will net the bank a recovery of about Rs 366 crore.
In a disclosure to the markets, JP stated that it had “…entered into a settlement agreement with ICICI Bank to transfer the said shares to the lender with a view to give thrust to the ongoing efforts of the company to reduce its debt.”
The exchange notification stated that the value or consideration of the shares in question will be determined by utilizing the closing price at National Stock Exchange of India Limited on the day before the shares are actually transferred to the lender’s demat account.
These shares would be worth Rs 366 crore at the JP Associates stock closing price of Rs 19.35. As a result, ICICI Bank will be able to recover Rs 366 crore from this transaction.
The bank has fully provisioned for the Rs 3,000 crore exposure of the private sector lender to JP Associates.
The Jaypee Group’s flagship company, JP Associates, announced on November 6 that it had fallen behind on loans totaling Rs 4,258 crore, principal and interest, as of October 31.
Just Rs 4,258 crore of the company’s total borrowing (including interest) is past due as of October 31, 2023, according to a notice sent by JP to the exchanges. The remaining loan amount is Rs 29,272 crore, which is due by 2037.
Axis Bank, Punjab National Bank, Bank of Baroda, Canara Bank, ICICI Bank, and State Bank of India (SBI) were among the lenders that provided JP with funding.
Fund-based working capital, non-fund-based working capital, term loans, and FCCB were the types of loans. JP had stated that it is reducing debt through tangible actions.
“The corporation has been reducing the borrowings in a concrete way as a wise borrower. The company stated in the November 6 exchange filing that with the planned disposal of the cement business and the reorganization under consideration, the borrowing will practically reach zero upon implementation of the revised restructuring plan.
This occurs as a result of lenders filing for bankruptcy against the builder.
SBI filed a motion with the National Company Law Tribunal in September to begin the company’s insolvency process.
A similar petition was also filed by ICICI Bank in September 2018.