Vedanta outlines payment plan for takeover of Jaiprakash Associates
What's the story
Mining giant Vedanta Ltd has emerged as the highest bidder in the auction for debt-ridden Jaiprakash Associates Ltd (JAIL). The company has offered a net present value of ₹12,505 crore. The payment will be made in installments, with an initial payment of ₹4,000 crore after NCLT approval and the remaining amount spread over five to six years.
Competitive bidding
Vedanta surpasses Adani Group's bid
Vedanta's bid surpassed that of the Adani Group in an auction held by lenders to find potential buyers for JAIL. The latter has interests in real estate, cement, power, hotels, and roads. The Committee of Creditors (CoC) identified Vedanta as the H1 bidder for JAIL after a challenge process among five bidders: Vedanta, Adani Group, Dalmia Bharat Cement Ltd, Jindal Power Ltd, and PNC Infratech Ltd.
Financial details
Payment structure and funding details
The entire payout for the acquisition will be made in a staggered manner, with the first payment of around ₹4,000 crore expected post-NCLT approval. This initial phase could take about a year, while the remaining payment is likely to be completed in the following years. The entire payout will be funded by Vedanta's balance sheet and supported by JAIL's internal accruals without overdependence on Vedanta alone.
Future steps
Ongoing process and JAIL's financial status
Although Vedanta has been identified as H1, the CoC is yet to finish the process and vote on the successful resolution plan. This is expected to take another four to eight weeks. After that, the implementation of the plan will take another three to four months. As of August 15, JAIL had an unpaid outstanding of ₹55,371.21 crore according to a stock exchange filing by the company.