Debt-ridden Jyoti Structures' insolvency resolution may conclude soon

One of the 12 large stressed assets, Jyoti Structures, which owes Rs 70 billion to its lenders, may see its debt resolution conclude within a few weeks. A resolution plan was proffered on April 6, and according to reports, 81 per cent of the lenders agreed on it. The Mumbai Bench of the NCLT will hear the matter on April 18. 

In the meantime, the resolution professional (RP) has to resolve issues related to payments to the security agency, sources said. In a filing with the BSE on Monday, the RP said that majority votes required for the approval were received, but are subject to approval by the Mumbai NCLT Bench. SBI is the lead bank in the case and might incur a deep haircut. Jyoti Structures has received only one bid from a group of high net-worth individuals, led by Sharad Sanghi, former MD and CEO of Netmagic Solutions.

The bid, being considered by the creditors, involves the group infusing Rs 1.7 billion into the company, with further repayments over 15 years. It will be of interest to see whether the plan, even with CoC consent, above the 75 per cent minimum requirement, will be accepted by the NCLT; given that the 270-day deadline has passed.