JAL in talks for cement business sale with Adani, UltraTech

NEW DELHI: Jaiprakash Associates (JAL) is in talks with the Adani Group and UltraTech to sell some of its cement assets as part of an exercise to raise funds for staving off a fresh attempt by lenders to initiate bankruptcy proceedings.
“…with a view to give thrust to the ongoing efforts of the company to reduce its debt, the board of directors in their meeting held today, the 10th October, 2022, have, inter-alia, decided to divest company’s significant cement business,” JAL said in a stock exchange filing.
Last month, TOI was first to report about sale of the cement plants, a day after it emerged that SBI had moved NCLT, seeking appointment of a resolution professional to oversee the insolvency process. It has pointed to defaults of over Rs 6,000 crore to argue for bankruptcy proceedings to start. This is the second time that lenders are seeking action from NCLT but the matter has not been listed so far.
While JAL has already sold off a large chunk of its cement business to reduce debt, which was estimated at around Rs 27,000 crore, it still has certain assets that it is seeking to monetise. In fact, a dispute over one of the plants was attributed as one of the reasons for JAL to delay payment to banks.
The company has plants in Rewa and Sidhi in Madhya Pradesh, Chunar and Sonebhadra in Uttar Pradesh and Krishna district in Andhra Pradesh, among others, which it plans to monetise to implement the five-year old restructuring plan.
Under the plan, Jaiprakash’s sustainable debt of Rs 5,090 crore at the end of March 2022 will retained by it, while the remaining Rs 12,500 crore will be transferred to a new special purpose vehicle with a potential debt asset swap, according to the information contained in the company’s balance sheet.
The promoters, the Gaurs, are hopeful that the banks will allow them to retain the company if they are able to put some fresh money on the table. Jaypee Group company Jaypee Infratech is already under bankruptcy proceedings for over five years now.