Jaiprakash Power may default on $200-mn bonds maturing in Feb

Facing a downturn in business, Jaiprakash Power Ventures today warned it is likely to default on its obligation to repay USD 200 million worth foreign currency convertible bonds in February and has sought rescheduling of the obligation to next year.
"The power sector has been severely impacted on account of various reasons beyond the control of the company, which adversely affected the company's operations leading to below expectation performance of top line and bottom line," the company said in a filing to BSE.
"The company would like to advise the holders of the convertible bonds that...The revenues generated from its power projects and existing cash balances may not be sufficient to fulfil its obligations under the convertible bonds on February 13, 2015," it said.

However, the company said that it is is confident of its ability to pay all amounts due under the convertible bonds on or before March 31, next year, the company said in a filing to BSE.
The company further said that it would like to seriously engage in discussions with the bondholders regarding the repayment schedule and invited them for negotiations on February 2 in Hong Kong.
"The company hereby invites all the bondholders...To a discussion on February 2 at a venue in Hong Kong," it said.

It further said that while the conditions surrounding the recovery of Indian infrastructure and power sector, have improved, recovery still remains a work in progress.

The government has undertaken a host of steps to improve circumstances of the Indian Infrastructure and power sector. However, given the conditions of the last few years, it may still take at least a year or two before these steps show results, it said.
Notwithstanding the difficulties faced in the past few years, the company has been able to substantially complete the power projects it had undertaken, it said.
Last year in November, it was announced that JSW Energy will acquire two hydro-electric projects of Jaiprakash Power Ventures in Himachal Pradesh for about Rs 9,700 crore.
Shares of Jaiprakash Power Ventures today closed at Rs 11.67 apiece, down 1.60 per cent on the BSE.