Jaypee plans to raise Rs2,000 crore, to sell Bhilai Jaypee Cement
New Delhi: Debt-ridden Jaiprakash Associates on Thursday said its proposed sale of entire 74% stake in Bhilai Jaypee Cement Ltd for an enterprise value of Rs1,450 crore is expected to be concluded by year-end and plans to raise up to Rs2,000 crore through sale of securities.
In a notice to shareholders for annual general meeting (AGM) to be held on 23 September, Jaypee Group’s flagship company Jaiprakash Associates said it has taken various steps to reduce its debt, including sale of cement plants.
To revive its business operations and repay debt, the company has divested a substantial portion of its cement business with a capacity of 17.2MTPA to Aditya Birla Group firm UltraTech Cement at an enterprise value of Rs16,189 crore.
“The transaction stood consummated on 29 June 2017 and that has resulted in reduction of debt of approx Rs14,000 crore, including repayment of outstanding loans to banks/FIs, part payment to holders of FCCBs (foreign currency convertible bonds), repayment of almost all outstanding fixed deposits and interest thereon and other priority payments,” the company said.
Giving update on other proposed transactions, the company said it plans to sell entire 74% stake in Bhilai Jaypee Cement Ltd to Orient Cement Ltd at a total enterprise value of Rs1,450 crore, which is “expected to be consummated by 31 December 2017”.
Bhilai Jaypee Cement owns 1.1MTPA clinker plant at Satna in MP and 2.2MTPA cement grinding unit at Bhilai, Chhattisgarh. Jaiprakash Associates has also sought shareholders nod for an enabling special resolution to raise up to Rs2,000 crore through issue of securities via routes like qualified institutional placement (QIP).
The amount would be used for capital expenditure, reduction of debts, general corporate purposes and for raising working capital requirement for real estate business and other businesses. Jaiparaksh Associates is a diversified infrastructure company and is engaged in segments as engineering, construction and real estate development, manufacture and marketing of cement, hospitality and sports management.
The company informed shareholders that in consultation with lenders it has finalised a debt realignment plan (DRP) wherein a part of the total debt would be retained in the company and the residual debt would be transferred along with land and certain other assets as part of a Real Estate Undertaking to a special purpose vehicle (SPV).
“The company is focusing on its core area of strength i.e. engineering and construction and is bidding for various construction projects. Further, steps are being taken to strengthen its marketing network, strategies for marketing its products in cement & real estate space,” the notice said.
Jaypee group is facing a debt crisis and its group firm Jaypee Infratech has taken over by a National Company Law Tribunal (NCLT)-appointed IRP for recovery of bad loans. The group is facing huge protest from home buyers because of significant delays in delivery of projects and doubt over its financial health.
Meanwhile, lenders of Jaiprakash Power Ventures Ltd have sought bids to sell at least 30% stake in the company to recover some of their dues.