Jaiprakash Associates defaults. Jaiprakash Associates defaults ₹2,897 crore on principal and interest repayments

Construction firm Jaiprakash Associates Ltd has defaulted on payments to lenders to the tune of ₹2,897 crore on February 28.

The company has defaulted on payment of ₹1,544 crore of interest overdues and another ₹1,353 crore worth of principal to lenders, according to a notification on the bourses.

Lenders were more than 30 banks including ICICI Bank, Axis Bank, IDBI Bank, Canara Bank and Bank of Baroda. The default is on obligations such as fund-based working capital, non-fund-based working capital, term loans and FCCB, the company said in the filing.

As of March 30, the company has a total outstanding debt of over ₹27,500 crore to creditors.

Debt break-up

The debt break-up includes ₹6,156 crore of sustainable debt, another ₹18,102 crore of other debt (that was to be swapped with SPV and potential debt assets swap), non-fund based working capital of ₹2,156 crore, fund-based working capital (secured) of ₹423 crore and foreign currency convertible bond of ₹723 crore.

The company in its stock market statement said the ‘Bucket 1 Debt’ of ₹11,689 crore, which is part of the ‘other debt’, was to be discharged against the sale of identified cement plants of the company and its wholly-owned subsidiary to UltraTech Cement Limited. The transaction of the said sale stands consummated.

The ‘Bucket 2a Debt’ of ₹6,367 crore, being ‘sustainable debt’ will continue as debt of the company for which master restructuring agreement (MRA) executed by the concerned 32 lenders. The terms of the MRA are being complied including creation of security in favour of lenders.

‘Bucket 2b Debt’ of ₹11,833.55 crore (₹13,590 crore original amount as reduced by ₹2,543.55 crore settled through direct debt assets swap), which is part of ‘Other Debt’ is to be transferred to a Special Purpose Vehicle namely Jaypee lnfrastructure Development Limited (a wholly-owned subsidiary of the company) along with identified land of the company.

Jaiprakash Associates, in a stock market filing, said it executed the MRA and took “due steps” but the banks “did not give effect to the debt position in their respective books” thereby causing “non-reconciliation of debt / default position between the company and banks’ books”.

In September 2018, ICICI Bank had filed an insolvency petition against Jaiprakash Associates before the Allahabad Bench of the National Company Law Tribunal.