Jayaprakash Associates Limited (JAL) has now taken a big turn in the race for acquisition of debt burden. The Vedanta Group has introduced a masterplan that has overtaken veterans like Adani, Dalmia, Jindal Power and PNC Infratech. Vedanta has proposed to repay the remaining amount in installments in a period of 5 to 6 years with an advance amount of Rs 4,000 crore. The Net Present Value (NPV) of this entire offer has been estimated at around Rs 12,505 crore, which is much better than all other contenders.
Vedanta at the forefront of the bid
The NARCIL -led Credit Committee (COC) has declared Vedanta as H1 Bidar in this bidding process. In this dialect, Vedanta has presented a practical plan of payment, not just the amount, but also. The company proposes that it will pay around ₹ 4,000 crore in the first phase after approval of NCLT, which may take about one year. After this, the remaining amount will be paid as installments in 5-6 years.
Loan, balance sheet and earnings will be paid
This acquisition plan of Vedanta is also special in the sense that the company will not resort to any new debt for this deal. Vedanta will arrange the entire amount through his balance sheet and internal earnings of JP Associates. This will not put additional financial pressure on Vedanta and after the acquisition, the company will also be able to operate easily.
However, the final decision is yet to be left. The COC has to do the final voting, which may take 4 to 8 weeks. After voting, the scheme may take 3-4 months to get approval from NCLT.
Vedanta will benefit from JP’s business
Jayaprakash Associates has various businesses like cement, power, real estate, hotels and road construction. Given Vedanta’s existing portfolio, these assets can prove to be very beneficial for the company. Especially the power sector, where Vedanta is already active, JP’s assets will further strengthen its operations. Apart from this, Vedanta is also likely to get strategic benefits from limestone and coal mining. JP’s real estate projects may further extend through Vedanta partnership or redevelopment.
Debt of more than 55,000 crores
JP Associates is currently in debt of more than ₹ 55,371 crore. In such a situation, this deal can bring a big relief for the company. Vedanta’s offer not only gives the possibility of maximum recovery to the creditors, but also puts a practical plan for the restructuring of the company.