Adani Group Acquisition: The Allahabad bench of the National Company Law Tribunal (NCLT) has approved the resolution plan of Adani Enterprises for bankrupt Jaiprakash Associates Limited (JAL). In this sequence, NCLT also rejected the challenge of Vedanta Limited. There are total claims of Rs 57185 crore on Jaiprakash Associates, a big company of Jaypee Group. Its major creditors also include National Asset Reconstruction Company Limited (NARCL).
Why did the company go bankrupt?
The company took huge loans from banks like SBI and ICICI to make huge investments in many power plants and cement factories including Yamuna Expressway. Later, due to lack of proper earning from the projects and increase in interest rates, the company was not able to repay the loan on time and it was declared default. Now Adani Group is going to buy this debt-ridden company for Rs 15,000 crore. Adani Group had made an offer of Rs 15,000 crore to buy Jaypee Associates, which has now been approved by NCLT.
Their money will be returned to the banks
Companies like Anil Aggarwal’s company Vedanta Limited and Dalmia Bharat were involved in the race to buy JP Associates, but ultimately Adani Group won. A part of the Rs 15,000 crore received from Adani Group for purchasing the company will be used to repay the loan from banks. The banks committee also voted in favor of Adani Group for this deal.
What will Adani Group get?
- Under this deal, Adani Group will get many valuable properties of Jaypee Group such as 3985 acres of land in Noida and Greater Noida.
- 5 luxury hotels of Jaypee Group.
- 24% stake in a company named Jaiprakash Power Ventures.
- Cement manufacturing factories, whose capacity is up to 6.5 million tonnes annually.
Vedanta had bid Rs 17000 crore
Vedanta had bid a total of Rs 17000 crore to buy the company. However, the company had initially said to make immediate payment of Rs 4000 crore and the remaining amount in the next 5-6 years. At the same time, Adani Group said that it is ready to repay Rs 6000 crore out of Rs 15000 crore immediately and the remaining amount in just 2 years, hence the banks chose Adani Group.
What objection does Vedanta have?
When the process of buying JP Associates started, companies like Vedanta and Dalmia Bharat had submitted their bids within the deadline. At first Adani Group did not show interest in buying the company, but later the company presented a big offer to buy it. Vedanta had opposed this very thing. Banks and NCLT accepted Adani Group’s proposal because the company was returning money in large amounts and quickly.
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