SBI files 'insolvency petition' against Jaiprakash Associates in NCLT

JAL is involved in cement manufacturing, engineering and construction, expressways, real estate, hospitalities, wind/thermal power plants at various locations all over India.

The State Bank of India (SBI) filed a corporate insolvency petition against construction firm Jaiprakash Associates Limited (JAL) for a debt default of Rs 6,892.48 crore the Business Line reported. 

JAL (incorporated in 1995) was formed in 2004 through the amalgamation of Jaiprakash Industries with Jaypee Cement.

JAL is involved in cement manufacturing, engineering and construction, expressways, real estate, hospitalities, and wind/thermal power plants all over India.

The lender filed the petition before the Allahabad Bench of the National Company Law Tribunal (NCLT) on September 20. 

December 10, 2015, is notified as the date of debt default by the National E-Governance Services Limited (NeSL).

Under the Insolvency and Bankruptcy Code, Jaiprakash Associates, a flagship firm of the debt-ridden Jaypee Group, was included in the Reserve Bank of India's second list of 26 big loan defaulters. The bankruptcy proceedings were initiated against them in August 2017. 

In September 2018, the ICICI Bank filed an insolvency petition in September 2018. According to the report, the said matter has not been admitted and adjourned for the last four years.

Currently, JAL has a huge outstanding debt estimated to be around Rs 26,000 crore. It has tried to convince its lenders of a restructuring proposal outside the IBC, but without any success. 

Notably, Jaypee Infratech, also a Jaypee group company is already under the IBC process.

The SBI has also proposed to the court to appoint Bhuvan Madan as the interim insolvency professional for the case.

In total, 32 banks have exposure to JAL which include ICICI Bank, Axis Bank, Bank of Baroda, IDBI Bank and Canara Bank