Real Estate
Jaiprakash Associates' Creditors Stake Claim of Rs 51,914 Crore Amid Insolvency Proceedings
By GeoSquare News Desk · Published 2024-06-29
The financial creditors of Jaiprakash Associates Ltd (JAL), which is undergoing corporate insolvency resolution process, have submitted claims worth Rs 51,914 crore to the resolution professional. State Bank of India has submitted the highest claims of Rs 15,465 crore, accounting for 30% of the total claims. ICICI Bank, with claims of Rs 9,203 crore, accounts for almost 18% of the total claims. Other significant creditors include IDBI Bank, LIC, and Asset Care & Reconstruction Enterprise Limited.
Among the financial creditors, 31 banks and financial institutions, as well as 1,517 allottees of real estate projects of the company, have submitted claims. Real estate allottees have submitted claims of Rs 1,893 crore, while operational creditors have submitted claims worth Rs 1,887 crore.
The National Company Law Tribunal (NCLT) gave its nod to initiate insolvency proceedings against debt-ridden Jaiprakash Associates Ltd on 3 June, admitting the plea filed by private lender ICICI Bank. Jaiprakash Associates Ltd, the flagship firm of Jaypee Group, is mainly into construction, cement, and hospitality businesses. The company has sold many cement plants in the last few years to reduce its debt.
A two-member bench at NCLT, Allahabad, appointed an interim resolution professional (IRP) and directed the initiation of a Corporate Insolvency Resolution Process (CIRP) against JAL. The tribunal has also dismissed the merger of Jaiprakash Associates Ltd with Jaypee Infrastructure Development Ltd.
In September 2018, ICICI Bank filed an insolvency petition against JAL under section 7 of the Insolvency and Bankruptcy Code (IBC). State Bank of India had also approached NCLT against JAL, claiming a total default of Rs 6,893.15 crore as of September 15, 2022. Jaiprakash Associates was part of the Reserve Bank of India's list of 26 big loan defaulters to commercial banks for initiating bankruptcy proceedings in August 2017.
Jaypee Group is a leading Indian conglomerate with interests in construction, cement, and hospitality. Its flagship company, Jaiprakash Associates Ltd, has been facing financial difficulties in recent years, leading to the initiation of insolvency proceedings.
ICICI Bank is a leading private sector lender in India, known for its financial services and banking solutions. State Bank of India is the country's largest public sector bank, offering a range of financial services and products.