Vedanta Offers ₹4000 Crore Upfront for Jaiprakash Associates, Rest Over 5-6 Years

New Delhi, September 7 (PTI): Mining conglomerate Vedanta Ltd has secured the winning bid for the debt-laden Jaiprakash Associates Ltd (JAIL), offering a significant initial payment of ₹4000 crore post approval by the National Company Law Tribunal (NCLT). The remaining balance will be paid over the next 5-6 years, sources revealed.

Vedanta outbid the Adani Group with a bid whose net present value (NPV) is ₹12,505 crore. This auction was conducted by lenders to find suitors for JAL, whose interests span real estate, cement, power, hotels, and roads. JAL is currently undergoing the Corporate Insolvency Resolution Process (CIRP) under the Insolvency and Bankruptcy Code (IBC).

The Resolution Professional invited Resolution Plans on June 24. Among the five bidders—Vedanta, Adani, Dalmia, Jindal Power, and PNC Infratech—Vedanta emerged as the H1 bidder at the NPV value of ₹12,505 crore. Sources confirmed that Vedanta was identified as the H1 bidder for Jaiprakash Associates Limited (JAL) by the NARCIL-led Committee of Creditors (CoC).

“The entire pay-out is expected to be made in a staggered manner, with the first part of the payment expected to be around ₹4000 crore, which will be post NCLT approval. This could take around a year, and the timeframe for the remaining payment would be approximately 5-6 years,” explained a person familiar with the bid terms.

Given the staggered payment schedule, it will be funded by Vedanta's balance sheet and supported by the internal accruals of the corporate debtor (JAL). This approach minimizes overdependence on Vedanta's balance sheet, which generates substantial free cash flows.

Although Vedanta has been identified as H1, the CoC is yet to conclude the process and vote on the successful resolution plan, which is expected to take another four to eight weeks. Post this, the implementation of the plan will take an additional three to four months.

JAL has an unpaid outstanding of ₹55,371.21 crore as of August 15, according to a stock exchange filing. Vedanta emerged as the H1 bidder by offering a payment of ₹12,505 crore based on a Net Present Value (NPV) basis. In such auction processes, where payment terms are staggered over several years, the offered amount is measured using the NPV method. This method evaluates the profitability of a project or investment by comparing the present value of future cash inflows to the current cost of the investment, also known as the 'time value of money' in accounting terms.

JAL operates in five key verticals: power, real estate, cement, hotels, and EPC (Engineering, Procurement, and Construction). These sectors complement Vedanta's existing businesses, including its power portfolio, which includes Talwandi Sabo and Meenakshi Energy.

“Vedanta will realize its synergies in JAL's assets through its experience in metals, mining, and power and will also tap the potential of JAL's limestone and coal mines. Further, once Vedanta's power business is demerged, the power business from JAL will add heft to it. The real estate assets also have development potential through partnerships,” sources added.

This acquisition is a strategic move for Vedanta, enhancing its presence in multiple sectors and leveraging the potential of JAL's diverse assets.