Uncertainty looms over Jaypee’s cement deal with UltraTech, ICICI begins debt restructuring

As the sale of Jaiprakash Associates Limited (JAL) cement assets to Kumar Mangalam Birla’s UltraTech Cement hit a roadblock, the ICICI Bank began strategic debt restricting.

This move by ICICI Bank, which is the lead banker for (JAL), will also initiate a process that could translate into lenders cumulatively taking over the company.

People familiar with the development told ET that UltraTech wanted to minimise the ticket size of the Rs 15,900-crore transaction by hand picking few assets only, now possible under the recently amended Mines and Minerals Development and Regulation (MMDR) Act.

In this regard, JAL and its lenders have sent feelers to other potential suitors such as JSW Group, KKR, etc.

Meanwhile, UltraTech, reportedly, sent letters to JAL's lenders saying it has entered into a binding agreement with the company and that it is illegal to engage with anyone else for any negotiations for these assets.

JAL owes its lenders over Rs 30,000 crore and the sale of its cement assets is a vital component of its debt reduction strategy.

"JLF will have three months' time to either approve the SDR or reject it. During this period, the lenders will treat JAL as a regular account," a person familiar with the development told ET.

The debt restricting process kicks off when a company defaults on its repayment schedule.

But until the time the lenders' forum takes a call on SDR, the loan is not considered a non-performing asset.