Jaiprakash Associates will pay ICICI Bank shares equivalent to a 7.71% ownership stake in order to satisfy a portion of the loan.

15 Nov 2023 , 11:16 AM

In order to pay off a portion of the outstanding loan, the crisis-hit Jaypee Group’s flagship company, Jaiprakash Associates Ltd (JAL), would offer ICICI Bank a 7.71% stake in the business, or Rs 366 crore at the current market price.

ICICI bank reportedly has a about Rs 3,000 crore exposure to JAL, which is involved in a variety of industries including real estate, hotels, construction, and cement. 

JAL announced in a regulatory filing on Tuesday that it has reached a settlement deal with ICICI Bank and will be giving the bank around 18.93 crore shares.

‘The Company, along with Trusts holding 18,93,16,992 equity shares of the Company have entered into a Settlement Agreement with ICICI Bank (lender) to transfer the said shares to lender with a view to give thrust to the ongoing efforts of the Company to reduce its debt,’ JAL stated.

On Monday, JAL’s share price was trading at Rs 19.35 a share on the BSE. 18.93 lakh shares are worth Rs 366 crore at the pricing on Monday.

It further stated that the value/consideration of the shares would be determined using the closing price at the National Stock Exchange of India the day before the shares were actually transferred to the lender’s demat account.

These shares were pledged to ICICI Bank, which was disclosed separately by ICICI Bank.

 ‘GACL Trust, JEL Trust, JCL Trust, and JHL Trust (collectively, the obligors) have agreed to transfer their shares in the company to the Bank in settlement of their payment obligations in relation to the facilities extended to JAL by ICICI Bank,’ ICICI Bank stated.

It further stated that these shares make up 7.71 percent of JAL’s paid-up share capital.

Following the obligors’ settlement, ICICI Bank said that it will lower its debt to JAL to the amount specified in the settlement agreement, according to the value of the shares that were handed to the bank.

According to reports, ICICI Bank’s primary exposure to JAL is approximately Rs 3,000 crore, which is fully recorded in the bank’s books.

ICICI Bank filed a petition for JAL’s insolvency in September 2018.

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