Lenders Skeptical About Jaiprakash Associates' One-Time Settlement Plan

Lenders of Jaiprakash Associates Ltd expressed doubts over the company's one-time settlement proposal. The NCLAT proceedings revealed ongoing insolvency issues since 2017. Banks were asked to review the proposal by June 24, but further clarifications from JAL postponed responses. The next hearing is set for July 3.

Lenders of Jaiprakash Associates Ltd (JAL) voiced their reservations over the company's one-time settlement (OTS) proposal on Monday, expressing dissatisfaction with its terms.

During the NCLAT proceedings, the lender's counsel highlighted that the insolvency plea against JAL was filed in 2017. For seven years, JAL has purportedly used settlement talks to delay proceedings.

At the previous hearing on June 10, 2024, the National Company Law Appellate Tribunal (NCLAT) had instructed the banks to consider JAL's OTS proposal by June 24. However, during the recent session, it was noted that the banks had not responded to the proposal due to last-minute clarifications issued by JAL.

Following a brief hearing, NCLAT scheduled the next session for July 3 and instructed JAL's lenders to review the OTS and submit their replies.

The appeal was initiated by Sunil Kumar Sharma, from JAL's suspended board, contesting the Allahabad NCLT's order.

On June 3, the Allahabad NCLT accepted a petition from ICICI Bank, appointing Bhuvan Madan as the interim resolution professional and suspending JAL's board.

During the last hearing, JAL's counsel asserted that the company was willing to meet the entire payment within 18 weeks if the banks accepted the OTS.

Earlier, the OTS proposal included an upfront payment of Rs 200 crore and the remaining Rs 16,000 crore to be cleared within 18 weeks. However, the Allahabad NCLT dismissed it and initiated the Corporate Insolvency Resolution Process (CIRP).

The NCLAT's two-member vacation bench mentioned that JAL might consider depositing a larger amount by the next hearing date to facilitate a resolution.

(This story has not been edited by Devdiscourse staff and is auto-generated from a syndicated feed.)