ICICI Banks files insolvency plea against Jaiprakash Associates

Leading private sector lender ICICI Bank has filed insolvency petition against Jaiprakash Associates before the National Company Law Tribunal (NCLT).

The Allahabad bench of NCLT has asked ICICI bank to serve notice to its corporate debtor Jaiprakash Associates within three days and directed Jaypee group firm to file reply by September 17.

If NCLT allows the plea of the ICICI bank, then this will be the second company of the crisis hit Jaypee group facing insolvency.

"Financial creditor is directed to serve notice on the corporate debtor and file affidavit of service within three days. Reply, if any, may be filed within seven days," said NCLT in its order Monday.

The tribunal has directed to list the matter on September 17 for next hearing.

While, confirming the development, Jaiprakash Associates informed the exchanges, "The Company has been given time to file its reply within seven days and the matter is listed for September 17, 2018".

The Supreme Court, on August 9, while ordering restart of the corporate insolvency resolution process against Jaypee Infratech, had allowed banks to file a similar petition against Jaiprakash Associates.

Jaiprakash Associates, the flagship firm of the debt-ridden Jaypee group is a diversified infrastructure company engaged in engineering, construction or real estate development, manufacture or marketing of cement, hospitality and sports management.

The total debt of Jaypee group has crossed over Rs 70,000 crore and the same has come down below Rs 30,000 crore after the group sold cement and other businesses.

To revive its business operations and repay the debt, the company divested a substantial portion of its cement business, with a capacity of 17.2 million tonnes per annum, to UltraTech Cement Ltd at an enterprise value of Rs 16,189 crore.

The Jaypee group is facing a debt crisis and its group firm Jaypee Infratech Ltd has been taken over by a National Company Law Tribunal (NCLT)-appointed interim resolution professional for the recovery of bad loans.

Jaypee Infratech has an outstanding debt of nearly Rs 9,800 crore, of which Rs 4,334 crore pertains to IDBI. Other lenders are -- IIFCL, LIC, SBI, Corporation Bank, Syndicate Bank, Bank Of Maharashtra, ICICI Bank, Union Bank, IFCI, J&K Bank, Axis Bank and Srei Equipment Finance Ltd.

Jaypee Infratech is developing about 32,000 flats, of which it has delivered 9,500 apartments.

Jaypee Infratech currently has about Rs 24,000 crore worth assets, including land parcels, Yamuna Expressway and a hospital, sources had earlier said.

Jaypee Group had submitted Rs 750 crore in the registry of the Supreme Court for refund to buyers.

However, this amount has now been transferred to NCLT as per the order of the apex court.