Jaiprakash Power Ventures has sought its shareholders' nod, through postal and electronic ballot, to convert part of its outstanding debt of Rs 3,058 crore into 305.80 crore equity shares.
After this issue, the total public shareholding of the company will increase from 36.40 per cent to 68.84 per cent, which includes 51 per cent equity with lenders whose debt would be restructured, a company filing to BSE today said.
“A portion of the outstanding amount of debt (including unpaid interest) amounting to Rs 3,058 crore payable to such lenders by the company is converted into 305.80 crore equity shares of Rs 10 each (at a price determined in accordance with RBI circular,” the company’s proposal to shareholders said.
The result of the postal as well as electronic ballot will be declared on February 11, 2017.
The company had availed of assistance from various banks/ financial institutions.
Owing to various factors such as lack of visibility of a new power purchase agreement (PPA) for the 1,320 MW Jaypee Nigrie Power Plant and a delay in signing of PPA, low offtake by discoms and an abnormal decline in merchant tariffs, lower generation of power by 500 MW, the Jaypee Bina Thermal Power Plant has adversely impacted the operation of the company, leading to a decline in operating profits and liquidity constraints, it said.
The company could not pay the outstanding overdues to lenders in a timely manner due to these reasons.
The lenders had formed a Joint Lenders’ Forum (JLF) and formulated a Corrective Action Plan (CAP) for the company in order to resolve the stress on its financial state.
However, it said the company could not perform satisfactorily under the CAP due to various factors.
Therefore, the JLF had finally decided to invoke the provisions of Strategic Debt Restructuring (SDR) on July 25, 2016.
At the JLF meeting held on December 21, 2016, it was decided that the banks and financial institutions would convert a portion of the respective debt of each of such banks/ financial institutions, allocated to them into equity so that they shall, post-conversion, collectively hold 51 per cent of the fully paid-up equity share capital in the company amounting to Rs 3,058 crore divided into 305.80 crore shares of Rs 10 each or such number as might be required to be issued.
The company also said consequent to the issue and allotment of equity shares, lenders would have the right to divest their holdings in the equity shares to new promoter(s).
It may be noted that on implementation of the full resolution plan, there will not be any change in management or control and the existing management of the company would continue hitherto.