Jaypee creditors reject NARCL offer; opt for IBC route

7 Jun 2024 , 09:12 AM

The creditors of insolvent Jaiprakash Associates Ltd (Jaypee) have rejected the Rs 10,000 crore offer of National Asset Reconstruction Company Ltd (NARCL). They have instead opted for the NCLT route for resolution of the company’s insolvency.

After a six-year delay, Jaypee was admitted to the National Company Law Tribunal (NCLT) earlier this week. The company owes almost ₹30,000 Crore to a group of 32 creditors led by ICICI Bank. According to news reports, NARCL, which had offered ₹10,000 Crore to buy the debt in March, is no longer a priority for the lenders. Instead, they would want to evaluate the potential recovery from the company, which has real estate, hotel, and cement assets across the nation that could lead to a higher recovery.

“For a very long period, this account has been stuck. Now that there is some movement, it is more prudent to determine the likelihood of recovery. Since there was no indication of progress, lenders had taken the NARCL offer into consideration. Lenders will convene shortly to proceed with the bankruptcy procedure in light of that development,” an individual with knowledge of the situation stated to ET.

“The sheer size, scale and diversity of Jaypee’s assets mean that there can be some value expected which can be better than the 85% security receipt that the NARCL offers,” stated another individual who talked to ET.

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