The loan restructuring, for which a meeting of creditors will be called in the next few days, will help the organizers, led by Gaur the family that lost the Jaypee Infratech, their crown jewel, which had a huge land bank that ran from Noida to Agra along the expressways. The proposal has been on the table for several months, but so far the lenders have not made much progress.
Despite the fact that lenders are deliberately structuring, the company’s shares have surged in recent days, surging nearly 70% from Rs 8.86 on May 31 to nearly Rs 15 when they top again on the BSE. Volumes also rose sharply, which was another surprise in the market.
While exchanges were looking for an explanation for the recent rise, JAL said it had disclosed the information it needed and was not aware of any reason.
While the hoopla over loan restructuring, which will require RBI approval, is one trigger, the eventual FCCB conversion is said to be another reason for the rise. The higher price will again benefit the promoters who owned about 38.5% of the company’s shares. JAL entered the second group of two dozen companies commissioned by RBI for resolution in 2017. Despite the fact that several cases were resolved, JAL was in no rush to block it.
Bank sources, however, said that pushing the restructuring forward, despite behind-the-scenes maneuvers from at least one of the country’s top lenders, could prove challenging.
Let’s start with the fact that attempts at restructuring by creditors led by ICICI Bank are being made despite Maharashtra Bank the desire to declare the company, along with its founders and directors, willful defaulters is a sign that will deprive them of access to new financing from the banking system. In addition, there should be a rating from one of the agencies, suggesting that the event will be sustainable for an account that a few quarters ago turned into a non-performing asset.
In addition, RBI will have to change its position after identifying JAL as one of the cases where creditors were asked to file for bankruptcy, including removing the current management as a first step.
In addition to being the majority owner of Jaiprakash Associates, the title it has lost has assets in the cement and energy sectors.