Jaiprakash Associates approves debt restructuring
Jaiprakash Associates’ board has approved the transfer of certain assets and liabilities, including debt of over Rs 11,834 crore, to its subsidiary Jaypee Infrastructure Development Ltd as part of its efforts to cut the overall borrowing of the company.
The company had called a board meeting to consider the recommendations of the audit committee on the debt restructuring process approved by the Joint Lenders’ Forum. The Jaiprakash Associates Ltd (JAL) board “has consented to carry forward the same through the scheme of demerger of the identified assets and liabilities” into a wholly-owned subsidiary of the company, it said in a stock exchange filing late on Saturday.
“The scheme envisages a demerger of the undertaking comprising identified movable assets and liabilities to and vested in the wholly-owned subsidiary of the company, namely Jaypee Infrastructure Development Ltd, as a going concern,” it added. It further said there would be no change in the shareholding pattern of the transferor company as the “allotment of share by the transferee company against consideration is envisaged in favour of the transferor company itself”.
“Similarly, no change in the shareholding pattern of the transferee company is envisaged as it will continue to be a wholly owned subsidiary of the transferor company,” it added. There is no cash consideration in the scheme.
“The transferee company shall allot one lakh equity shares of Rs10 each at par to the transferor company under a slump exchange,” it said. The flagship firm of the debt-ridden Jaypee group is a diversified infrastructure company engaged in engineering, construction or real estate development, manufacture or marketing of cement, hospitality and sports management.