Adani gets SC nod to acquire Jaiprakash Associates for ₹14,500cr
What's the story
The Supreme Court of India has declined to interfere with Adani Enterprises Ltd.'s ₹14,543 crore resolution plan for the bankrupt Jaiprakash Associates Ltd (JAL). The decision came today after Vedanta, a mining giant and the losing bidder in the process, challenged the lenders' approval of Adani's plan. The court declined to interfere with earlier orders from both the National Company Law Tribunal (NCLT) and National Company Law Appellate Tribunal (NCLAT) that had cleared the way for this resolution plan.
Resolution oversight
NCLAT asked to hear Vedanta's plea expeditiously
While approving Adani's plan, the SC directed the committee overseeing the resolution process to seek prior NCLAT approval before taking any major steps. The appellate tribunal has been asked to hear this matter expeditiously, with a hearing scheduled for April 10. This comes after Vedanta alleged that its higher offer was ignored and that the process lacked fairness and transparency.
Bid dispute
Vedanta's challenge to Adani's plan rejected earlier
Vedanta's challenge to Adani's plan was rejected by both the NCLT and NCLAT. On March 24, the appellate tribunal declined interim relief, allowing implementation of Adani's plan to proceed, subject to the outcome of the appeal. It also refused to halt Jaiprakash Associates's delisting, saying that if the plan is eventually set aside, all actions taken under it would automatically stand reversed.
Value assessment
Lenders defended decision
Vedanta has alleged that lenders violated the principle of maximizing value via a fair and transparent process. It claimed to be the highest bidder with an offer of ₹12,505.85 crore on a net present value basis. However, lenders defended their decision, maintaining that it complied with all Insolvency and Bankruptcy Code (IBC) rules, and that no bidder has a guaranteed right to win even if it offers the highest value.
Plan
Resolution plan involves upfront cash recovery of ₹6,000cr
Adani's plan received around 93.8% of the voting share from financial creditors, well above the required threshold. National Asset Reconstruction Co. Ltd (NARCL), the largest creditor, played a key role in backing this plan. The resolution plan involves an upfront cash recovery of roughly ₹6,000 crore and a faster payment timeline of about two years, as opposed to Vedanta's proposal which spread payments over up to five years.