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Business News/ Companies / News/  Jaiprakash Associates seals settlement pact with ICICI Bank, to transfer 18.9 crore shares
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Jaiprakash Associates seals settlement pact with ICICI Bank, to transfer 18.9 crore shares

The price at which the shares would be transferred would be based on the trading price prevailing at the NSE on the day prior to the transfer of stake.

Jaiprakash Associates is the flagship firm of the crisis-hit Jaypee Group. Photo: Pradeep Gaur/MintPremium
Jaiprakash Associates is the flagship firm of the crisis-hit Jaypee Group. Photo: Pradeep Gaur/Mint

Jaiprakash Associates has entered into a settlement pact with ICICI Bank, whereby the company, along with its trusts, would be transferring more than 18.9 crore shares to the private lender, a regulatory filing stated on November 14.

The agreement is part of the efforts being undertaken by the flagship firm of crisis-hit Jaypee Group to reduce its debt burden.

JP Associates’ 18.93 crore shares, being transferred with mutual consent to ICICI Bank, were already pledged with the bank.

At last closing price of 19.35, these shares would amount to ~ 366 crore. The transaction shall result in recovery / writeback of 366 crores for the Bank.

“With a view to give thrust to the ongoing efforts of the company to reduce its debt, 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," the exchange filing said.

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The price at which the shares would be transferred was not disclosed, as Jaiprakash Associates noted that it would be based on the trading price prevailing at the National Stock Exchange (NSE) on the day prior to the transfer of stake.

“The value/consideration of the said shares shall be arrived on the basis of the closing price at National Stock Exchange of India Limited on the day prior to the day of actual transfer of shares to the demat account of the lender," it stated.

In the trading session on November 13, Jaiprakash Associates' scrip settled at 19.35 apiece on the BSE, up 6.55 percent as against the previous day's close.

ICICI Bank’s principal exposure to Jaiprakash Associates is approx. 3,000 crore, which has been fully provided in the books of the Bank.

The announcement of pact with ICICI Bank comes amid the ongoing Insolvency and Bankruptcy Code (IBC) proceedings against the company. The National Company Law Tribunal (NCLT) is scheduled to hear the case next on November 30.

JP Associates had on October 31 informed the stock exchanges that it defaulted on loans worth 4,258 crore. This includes a principal amount of 1,733 crore and interest of 2,525 crore.

"The total borrowing (including interest) of the company is 29,272 crore, repayable by 2037, against which only 4,258 crore is overdue as on October 31, 2023," it said.

ICICI Bank, which is among the lenders that have issued loans to Jaiprakash Associates, had filed an insolvency petition against the company in September 2018.

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Published: 14 Nov 2023, 02:53 PM IST
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