JAL Insolvency: The bankrupt company has finally been transferred to the name of Adani Group. Creditors of Jaiprakash Associates Limited (JAL) have selected Adani Enterprises as the buyer of JAL. According to an Economic Times (ET) report, JAL’s lenders ultimately chose Adani Enterprises because its upfront payment was higher, even though Adani’s net present value was about Rs 500 crore less than Vedanta’s Rs 17,000 crore bid during the electronic auction process.

Many other big names were involved in the race

Officials familiar with the matter said that Jaiprakash Associates’ creditors mostly included Indian banks, which supported Adani Enterprises’ takeover proposal of Rs 135 billion or $1.53 billion instead of Vedanta’s Rs 170 billion and considered it better than Vedanta’s bid. Apart from Adani and Vedanta, other bidders in the race were Dalmia Bharat, Jindal Power and PNC Infratech. An official said that controlling shareholder Manoj Gaur had also made a bid at the last moment, which was later withdrawn.

JAL’s largest lender

National Asset Reconstruction Company is the biggest lender to Jaiprakash Associates, which owes around Rs 55,000 crore and has been in insolvency since June last year. Bhuvan Madan of Deloitte is overseeing the process as JAL’s resolution professional. In this voting held on Tuesday, questions are being raised regarding the scoring method that how Adani came ahead in the race despite bidding less?

Many came forward to buy JAL

Earlier, five bidders had submitted plans to buy JAL, which included Adani, Vedanta, Dalmia Bharat, Jindal Power and PNC Infratech. Dalmia Bharat was initially at the forefront. Then it was told that the company did not participate in the e-auction later because the proposal was conditional.

Earlier this month, JAL promoter Manoj Gaur had also proposed a settlement of Rs 18,000 crore, but the lenders felt that he did not have proper proof of funding. Jayaprakash Associates, the flagship company of Jaypee Group, works in cement, power, engineering, hospitality, real estate and sports infrastructure, including a 1,000-hectare sports city in Greater Noida.

A major stumbling block in the insolvency process is the 1,000-hectare sports city, which is under legal scrutiny. Yamuna Expressway Industrial Development Authority (YEIDA) had canceled JP’s allotment in 2019, citing default of more than Rs 500 crore and lease violation. The CAG audit also revealed major irregularities in the allotment process.

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JP Power Share: Amazing rise is being seen in the shares of Jaiprakash Power Ventures (JP Power) today. In intraday trading, the shares jumped by 9 percent and were seen trading at the level of Rs 18.63. There is a reason behind this rise in shares today.

Why did Power Share become Rocket?

In fact, there are reports that Adani Group may defeat mining sector major Vedanta in the race to buy bankrupt infrastructure company Jaiprakash Associates (JAL). In the same sequence, small-cap share JP Power’s share on National Stock Exchange (NSE) and BSE rose by 9.12 percent to reach the day’s high of Rs 19.25.

Bankrupt Jaiprakash Associates has about 24 percent stake in JP Power. In such a situation, the market is hopeful that if Adani Group wins the bidding race, then it will bring profit to JP Power’s business in the market.

How did Adani defeat Vedanta?

First of all, when the auction was held in September to find a buyer for debt-ridden JP Associates, Vedanta was at the forefront of the race by bidding Rs 17,000 crore. Vedanta proposed to pay it in five years, whereas Adani Enterprises Limited, although bid Rs 12500 crore, has proposed to pay in two years. Perhaps it is believed that the company will ultimately fall into Adani’s lap because the Committee of Creditors (CoC) of JAL is considering Adani Group’s proposal to be better than Vedanta Group’s proposal. JAL’s business is spread across many big sectors like real estate, cement, power, hotels and roads.

Jaypee Infra MD arrested

Recently, Manoj Gaur, Managing Director of JP Infratech Limited, another company of Jaypee Group, has been arrested by ED in a case related to money laundering. ED alleges that Jaiprakash Associates, through Manoj Gaur, has committed a fraud of Rs 12,000 crore and embezzled the money of home buyers.

Disclaimer: (The information provided here is being given for information only. It is important to mention here that investment in the market is subject to market risks. Always take expert advice before investing money as an investor. ABPLive.com never advises anyone to invest money here.)

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Adani group: The Adani Group is in the process of buying another company soon. This time the Adani Group has decided to put Rs 12,500 crore at Jayaprakash Associates Limited (Jal), which is going through a period of bankruptcy. According to a report by Business Standard, people familiar with the case say that Adani Group is the largest bidding company to buy Jal.

Adani ready for advanced payment

Sources also say that the Adani Group remains a strong contender by promising payments worth more than Rs 8,000 crore in advance. Let us know that Dalmia Group, JSPL (Naveen Jindal), Vedanta and PNC Infratech are also included in the race to buy JAL. Among all these, Adani Group is at the forefront of the race by bidding the most.

The company is spread in many sectors

Jayaprakash Associates is a major infrastructure company, which is spread over many different sectors like real estate, cement, power and hotel. The capacity of Jal’s cement plant is 10 million tonnes. The company also has a fertilizer factory with five hotels. Apart from this, the land on Noida Expressway is 2500 acres of land and Buddha National Circuit is also of Jal, where earlier Formula One race was held.

Heavy debt burden on the company

However, the company is currently facing financial crisis and is going through insolvency under India’s Insolvency and Bankruptcy Code (IBC). Many banks have debt on this. Total 25 banks together gave Jal a loan of Rs 48,000 crore. These include Punjab National Bank and IDBI Bank. On March 12, these banks sold the company’s total loan of Rs 48,000 crore to the National Asset Reconstruction Company (NARCL) for 12,700 crore.

Why is the Adani Group wanting to buy Jal?

Many big companies are interested in buying Jayaprakash Associates. Adani Group wants to increase its business in sectors like cement, real estate, so he wants to buy the company. Buying JAL will help the Adani Group to strengthen its hold in Central and Northern India. Let us tell you that the price of JL’s share is only 3 rupees. The message of Trading Restricted is seen in front of its stock. It may be that the acquisition of Adani Group accelerated the company’s shares.

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