Adani Group Gains Majority Support for Jaiprakash Associates Deal

Post by : Bianca Suleiman

In a crucial development, the Adani Group has garnered support from the majority of creditors to acquire Jaiprakash Associates Ltd (JAL), presenting the highest upfront bid against other contenders. Valued at Rs 14,535 crore, this acquisition aims to revitalize the ailing infrastructure and cement company that has faced ongoing financial difficulties since defaulting on loans exceeding Rs 57,000 crore.

The Committee of Creditors (CoC) reviewed bids from Adani Enterprises, Vedanta Ltd, and Dalmia Cement (Bharat), with Adani receiving an impressive 89% of the votes. Dalmia and Vedanta trailed significantly, while a few lenders, including SBI and ICICI Bank, who represent less than 3% of the voting share, opted to abstain. The National Asset Reconstruction Company Ltd (NARCL), dominating 86% of the CoC voting power, was instrumental in guiding the decision.

Adani's proposal features an upfront payment of Rs 6,005 crore, alongside an additional Rs 6,726 crore to be disbursed over the next two years, yielding a net present value of approximately Rs 12,000 crore. In contrast, Vedanta's offer includes Rs 3,800 crore upfront, with deferred payments equaling Rs 12,400 crore over a five-year span, while Dalmia's bid is partially contingent upon a pending Supreme Court case with YEIDA.

Jaiprakash Associates entered the Corporate Insolvency Resolution Process (CIRP) in June of the previous year and boasts a varied portfolio that includes real estate, cement, power, hospitality, and engineering & construction. Key assets consist of the Jaypee Greens developments in Greater Noida and Noida, the Jaypee International Sports City near Jewar International Airport, four cement facilities in Madhya Pradesh and Uttar Pradesh, as well as several leased limestone mines. The company also oversees critical subsidiaries such as Jaiprakash Power Ventures Ltd and Yamuna Expressway Tolling Ltd.

The CoC employed a structured evaluation framework to ascertain the most feasible resolution plan. Adani's proposal was particularly appealing for its superior upfront payment and swift disbursement schedule, attracting lenders eager for quicker recoveries. This acquisition holds the potential to stabilize JAL's cement operations and ongoing engineering projects, including the Pakal Dul Dam in Jammu & Kashmir, and the Srisailam Canal project in Andhra Pradesh.