NEW DELHI: National Company Law Tribunal on Monday ordered the initiation of
insolvency proceedings
against
Jaiprakash Associates Ltd
(
JAL
), six years after lenders led by ICICI Bank first sought action.
The move will impact the company’s real estate business in Noida and Greater Noida, although the scale of operation in this company is much smaller than
Jaypee Infratech
, which was admitted for
insolvency
action in 2018, when ICICI had also moved against JAL.
Two years ago, with JAL defaulting on repayments, State Bank of India too had moved the tribunal against the company which was identified among two dozen for fast-track resolution.
JAL, the flagship company of the Jaiprakash Group has real estate projects under the Wish Town brand in Noida, where delivery of some units is pending, although the exact number was not immediately available. In its last annual report, the company had said that it had offered possession of over 21,000 residential units till March 2023.
Buyers with registered JAL properties won’t be hit
With the initiation of insolvency proceedings against Jaiprakash Associates Ltd (JAL), an NCLT-appointed resolution professional will take charge with the board led by the Gaurs becoming defunct.
The move will not impact buyers of JAL apartments and villas whose properties have been registered.
While the case against it was pending, JAL had sold large plots of land in its Noida “township” to companies such as Max and Kalpataru, which are building high-end residential properties. Apart from real estate, the company has interests in cement, hotels, power and EPC. The company reported a loss of over Rs 1,500 crore during the last financial year.
In a stock exchange filing last month, JAL had said it had borrowings of a little under Rs 30,000 crore, and the defaults added up to Rs 4,616 crore. Weighed by massive debt, JAL had sought to deleverage, selling large parts of its cement and power businesses.
It still has a massive EPC construction business, building dams and power projects from Bhutan and Nepal to Gujarat and Telangana. The company had also built the marquee Formula 1 track, the first in the country, but could not hold on to it as the Yamuna Expressway Industrial Development Authority took over the land due to non-payment of lease rental.
Meanwhile, Suraksha Group, whose resolution plan for Jaypee Infratech Limited (JIL) was approved by
the National
Company Law Appellate Tribunal (NCLAT) last week, is likely to take over the debt-ridden company after a meeting next week.
The move will take the Mumbai-based Suraksha Group a step closer to resuming construction on nine stalled projects of Wish Town in Noida and other locations and renew hopes for 20,000 buyers who invested in flats 15-20 years ago.
As of now, JIL’s daily affairs are managed by an implementation and monitoring committee (IMC). Set up by the National Company Law Tribunal (
NCLT
), the committee is made up of officials from Suraksha, JIL, homebuyers and an IRP.
