Lenders Review Jaypee Group's Debt
Mumbai: Concerned over their massive exposure to the debt-laden infrastructure conglomerate Jaypee Group, its lenders met here on Monday to take stock of the situation.
The Manoj Gaur-led group is in the process of reducing its debt of over Rs 72,000 crore by selling some of its assets, which could also help it deleverage the balance sheet.
The consortium of as many as 30 lenders led by State Bank of India, and including IDBI Bank, Oriental Bank of Commerce among others, has an overall exposure of Rs 72,000 crore. Of which, Rs 8,000 crore is due by March. The meeting took place at the SBI headquarters in Mumbai.
"It was a regular review meeting and was to take stock as to how much of the assets has been sold by the group as well as how much more they are going to put on block," a senior public sector banker said.
As of now, the group is not a bad asset but at the same time not all is well at the group, said another banker, adding that the consortium met to see what could be done.
Jaypee Group subsidiary Jaiprakash Power Ventures is in the process of selling its three operational plants -the 300 MW Baspa-II hydroelectric plant, the 1091 MW Karcham Wangtoo hydroelectric plant (both in HP) and the 500 MW Bina thermal plant in MP - to reduce its overall debt.
Anil Ambani-led Reliance Power recently abandoned its plans to buy its three hydropower projects citing regulatory uncertainties.
However, within a week, the company announced that it had signed an agreement with Sajjan Jindal-run JSW Energy for selling these three plants.
The company had earlier this year signed a deal to divest these plants to the Abu Dhabi-based TAQA for Rs 9,689 crore but the deal did not go through.
According to the group, it has raised Rs 15,869 crore in the recent past through power and cement disinvestments and the sale of some land parcels, helping it pare its debt by about Rs 8,030 crore.
In August the company got into an agreement with Shree Cement to sell its grinding unit at Panipat in Haryana for Rs 360 crore. The plant has a capacity of 1.5 million tonne. In September last year, Jaypee Cement had sold two units with a combined capacity of 4.8 million tonne in Gujarat to the Aditya Birla Group's cement firm UltraTech for Rs 3,800 crore.
Recently, the KKR-backed Dalmia Cement had also struck a deal to buy 74 per cent in Jaiprakash Associates in its cement joint venture with steel maker SAIL for Rs 690 crore.
After several diversifications and high-cost projects like the Yamuna Expressway and the Buddh International Circuit, construction and engineering, along with cement, continue to bring in almost three-fourths of revenue to the Jaypee group.
Even after these disinvestments, the group still has a cement capacity of 32 mt and some 1700 mw of power plants ready to go onstream.
