JAL bidders to join challenge auction with ₹12,000 crore floor value

Lenders of Jaiprakash Associates have set Rs 12,000 crore as the minimum bid for a challenge auction on Friday, with five firms including Adani and Dalmia in contention

The lenders of Jaiprakash Associates Limited (JAL) have asked all resolution applicants to take part in a challenge auction for the distressed company on Friday with the minimum bid amount being set at ₹12,000 crore, according to people in the know.

 

This will be calculated in terms of net present value (NPV).

 

The challenge auction will take place via email where after every round of bids, the lenders will ask the participating companies to raise their offer by at least ₹250 crore.

 

The committee of creditors (CoC) has also sought a commitment from resolution applicants to pay an extra amount to the lenders if the Yamuna Expressway Industrial Development Authority (Yeida) land issue is resolved in their favour, sources said.

 

The bids for JAL have been contingent on the outcome of a legal dispute involving JAL’s 1,000-hectare Sports City project in Greater Noida.

 

The Allahabad High Court in March upheld a decision by the Yeida to cancel land allotment for the project. The matter is pending before the Supreme Court.

 

 

Adani group, Dalmia group, Vedanta group, Jindal Steel & Power, (JSPL), and PNC Infratech are the five companies which are in the race for the beleaguered JAL.

 

Its asset base spans cement, real estate, infrastructure, hospitality, and marquee developments like Jaypee Greens, Wish Town, and the International Sports City near the upcoming Jewar Airport.

 

“The bidders will get one hour to review and discuss their bid before each round. Lenders will take half an hour to review each round of bids through a formula-based approach,” said a person close to the development.

 

If the highest bid in the two consecutive rounds is the same then the challenge process will stop. Then, lenders will ask all resolution applicants to submit a copy of their revised plan along with the source of funds, sources said.

 

“The revised plans would provide the lenders an understanding of the sum being offered besides the NPV such as settlement for the Yeida land, among others,” the source added.

 

Creditors’ total admitted claims against JAL stand at over ₹59,000 crore.

 

Of the five, two bidders — Adani group and Dalmia Bharat — have secured the approval of the Competition Commission of India (CCI) for their acquisition proposals. Two others — PNC Infratech and Jindal Power — are currently under review.

 

Vedanta group is yet to apply for the CCI nod for its resolution plan.