Adani Leads Race to Acquire Debt-Ridden Jaiprakash Associates
Adani Enterprises is poised to become the highest bidder for Jaiprakash Associates Ltd (JAL), outpacing Vedanta with a faster payment proposal. The conglomerate has offered to clear the acquisition amount within two years, while Vedanta proposed a five-year payment schedule.
Key Takeaways
- Adani’s two-year payment plan scored higher than Vedanta’s five-year offer
- Committee of Creditors evaluated five bidders using evaluation matrix
- Resolution plan expected to go for voting within two weeks
- JAL faces admitted financial claims of approximately ₹60,000 crore
Bidding Process and Evaluation
In early September, Vedanta Group had initially emerged as the highest bidder with an offer of ₹12,505 crore net present value. However, after fresh resolution plans were submitted on October 14, the Committee of Creditors reevaluated all proposals.
The CoC met last week to deliberate on the comprehensive resolution plans, scoring Adani Enterprises highest, followed by Dalmia Cement (Bharat) and then Vedanta. Dalmia’s payment offer is reportedly contingent upon Supreme Court’s judgment in a pending matter between JAL and development authority YEIDA.
Payment Terms Give Adani Edge
Adani Group’s faster payment commitment has given it a significant advantage over Vedanta’s back-ended payment structure. Last month, JAL’s erstwhile promoters submitted a settlement offer under Section 12A but failed to provide clear funding sources.
Sources indicated such offers typically aim to derail resolution processes. The promoters had earlier attempted to obtain a stay on the process, but courts did not grant relief.
Massive Debt and Stalled Projects
Jaiprakash Associates was admitted into Corporate Insolvency Resolution Process on June 3, 2024, after defaulting on loan payments. The company’s financial creditors have admitted claims of around ₹60,000 crore, affecting over a thousand homebuyers across various projects.
The National Asset Reconstruction Company (NARCL) leads the claimant list after acquiring stressed JAL loans from a consortium headed by State Bank of India.
JAL’s Extensive Business Portfolio
JAL’s assets include major real estate developments like Jaypee Greens in Greater Noida, Jaypee Greens Wishtown in Noida, and Jaypee International Sports City near the upcoming Jewar International Airport. The company also operates five hotel properties across Delhi-NCR, Mussoorie, and Agra.
Its industrial assets include four cement plants in Madhya Pradesh and Uttar Pradesh, though these are currently non-operational. The company also holds investments in several subsidiaries including and Yamuna Expressway Tolling Ltd.
The financial stress has impacted critical infrastructure projects including the Pakal Dul Dam in Jammu & Kashmir and Srisailam Canal project in Andhra Pradesh.
