Jaiprakash Associates on Tuesday, November 14, announced that it has entered into a settlement agreement with ICICI Bank to transfer equity to the lender as part of its efforts to reduce its debt burden.
In a statement to exchanges, JP Associated said, “With a view to give thrust to the ongoing efforts of the Company to reduce its debt, the Company, alongwith Trusts holding 18,93,16,992 Equity shares of the Company have entered into a Settlement Agreement with ICICI Bank (Lender) to transfer the said shares to Lender.”
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JP Associates added that the “value/consideration of the said shares would be arrived on the basis of the closing price at National Stock Exchange of India Limited on the day prior to the day of actual transfer of shares to the demat account of the Lender.”
Jaiprakash Associates has faced massive delays in debt resolution, prompting lenders to move the bankruptcy court and also initiate conversations with the National Asset Reconstruction Vompamy Limited (NARCL), CNBC-TV18 had earlier reported.
The announcement comes just weeks after an NCLT order revealed that the ICICI Bank and JP Associates had jointly requested the NCLT to postpone the IBC hearings until the end of November.
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Both parties had indicated that they were engaged in negotiations for a loan restructuring proposal.
The company has been in talks with its lenders led by ICICI Bank to resolve its debt issue for over five years now. ICICI Bank has first referred JP Associates to the NCLT in 2018 on the directions of the Reserve Bank of India,and SBI had also moved NCLT last year under the Insolvency and Bankruptcy Code.
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However, since then, substantial progress has remained elusive. JP Associates currently holds a debt of approximately ₹29,000 crores, with SBI, ICICI Bank, and IDBI being some of the principal lenders involved.
In a regulatory filing, Jaiprakash Associates On November 6 said that it had defaulted on a borrowing of ₹4,258 crore from banks and financial institutions. Before this, it had defaulted on loans worth ₹4,044 crore from various banks as on June 30, and on loan repayments of a principal amount of ₹1,642 crore and interest of ₹2,314 crore as of April 30, and so on.
