HomeBusiness NewsCompanies NewsNCLAT declines stay on NCLT's insolvency order against Jaiprakash Associates
NCLAT declines stay on NCLT's insolvency order against Jaiprakash Associates
Last week, Jaiprakash Associates' suspended board challenged the NCLT's June 3rd order, arguing that insolvency proceedings would jeopardise the company's infrastructure projects. They contended that the company could resolve its debt through a one-time settlement offer that had been in development.
The National Company Law Appellate Tribunal (NCLAT) has decided not to stay the order issued by the National Company Law Tribunal (NCLT) that initiated insolvency proceedings against Jaiprakash Associates (JP Associates). The NCLAT has also directed ICICI Bank, the lead creditor, to consider a one-time settlement proposal submitted by the company.
Last week, Jaiprakash Associates' suspended board challenged the NCLT's June 3rd order, arguing that insolvency proceedings would jeopardise the company's infrastructure projects. They contended that the company could resolve its debt through a one-time settlement offer that had been in development.
During the arguments, JP Associates' counsel outlined a plan to split the Rs 30,000 crore debt into three segments, proposing repayment through the sale of some plants and restructuring the remaining debt. Despite this proposal, which has been on the table for some time, lenders are reportedly still considering a sale to the National Asset Reconstruction Company.
Even with this proposal in place, the company was admitted to the NCLT for insolvency proceedings. The NCLAT's refusal to stay the NCLT order and its directive for banks to consider the settlement will be further deliberated in the next hearing on June 24th.
Jaiprakash Associates has an outstanding debt of nearly Rs 30,000 crores, including interest, owed to 22 banks. This includes major lenders such as ICICI Bank, State Bank of India, and IDBI Bank.
The stock of Noida based, JP Associates rose by 5% in trade on Wednesday to close at Rs 10.32 per share. The company currently has a market capitalisation of Rs 2,533 crore and has delivered negative returns of around 54% over the last 6 months.
Last week, Jaiprakash Associates' suspended board challenged the NCLT's June 3rd order, arguing that insolvency proceedings would jeopardise the company's infrastructure projects. They contended that the company could resolve its debt through a one-time settlement offer that had been in development.
During the arguments, JP Associates' counsel outlined a plan to split the Rs 30,000 crore debt into three segments, proposing repayment through the sale of some plants and restructuring the remaining debt. Despite this proposal, which has been on the table for some time, lenders are reportedly still considering a sale to the National Asset Reconstruction Company.
Even with this proposal in place, the company was admitted to the NCLT for insolvency proceedings. The NCLAT's refusal to stay the NCLT order and its directive for banks to consider the settlement will be further deliberated in the next hearing on June 24th.
Jaiprakash Associates has an outstanding debt of nearly Rs 30,000 crores, including interest, owed to 22 banks. This includes major lenders such as ICICI Bank, State Bank of India, and IDBI Bank.
The stock of Noida based, JP Associates rose by 5% in trade on Wednesday to close at Rs 10.32 per share. The company currently has a market capitalisation of Rs 2,533 crore and has delivered negative returns of around 54% over the last 6 months.
(Edited by : Ajay Vaishnav)
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