JPVL allots 305.80 cr shares to lenders to reduce debt

Jaiprakash Power Ventures Ltd (JPVL) today alloted 305.80 crore equity shares to its lenders as part of debt restructuring scheme, which would reduce the debt of Rs 3,058 crore.
Following the allotment, financial institutions would have 51 per cent equity share in the Jaypee group firm.
Stakeholders Relationship Committee of the company at its meeting held today, alloted 305.80 crore equity shares of Rs 10 each at a price of Rs 10 to its 23 lenders.
"We wish to inform that upon approval of allocation of conversion of part of outstanding debt amount into equity shares amongst banks and financial institutions, the stakeholders relationship committee at its meeting held today has alloted 305.80 crore equity shares of Rs 10 each at a price of Rs 10," JPVL said in a BSE filing.

It further added: "Subsequent to allotment of above equity shares, these lenders shall collectively hold 51 per cent of post issue equity share capital and accordingly the outstanding loan amount of the company would stand reduced by the equal amount i'e Rs 3,058 crore."
The major lenders are ICICI, IDBI, Punjab National Bank, Central Bank of India, SBI, United Bank of India, Canara Bank, Oriental Bank of Commerce, UCO Bank, IDFC, LIC, Syndicate Bank, Corporation Bank, Indian Overseas Bank, Allahabad Bank, Bank of India.

On February 11, JPVL had informed that it has received shareholders' nod through postal and electronic ballot for debt restructuring.

Owing to various factors such as lack of visibility of new power purchase agreement (PPA) for 1,320 MW Jaypee Nigrie Power Plant, delay in signing of PPA, low off-take by discoms, abnormal decline in merchant tariffs and lower generation of power, Jaypee Bina thermal power plant has adversely impacted operations of the company, leading to decline in operating profits and liquidity constraints, it had said.
The company could not pay the outstanding overdues to lenders in a timely manner due to the aforesaid reasons.
The lenders had formed a joint lenders' forum (JLF) and formulated a corrective action plan (CAP) for the company in order to resolve the financial stress.

However, it stated that the company could not perform satisfactorily under CAP due to various factors.
Therefore, JLF had finally decided to invoke the provisions of strategic debt restructuring (SDR) on July 25, 2016.
At the JLF meeting on December 21, it was decided that the banks and financial institutions will convert a portion of respective debt of each of such bank or financial institution into equity so that they will, post conversion, collectively hold 51 per cent of the fully paid-up share capital.