Jaypee’s Rs 4,500 crore payment is overdue
NEW DELHI: Cash-strapped Jaiprakash Associates (JAL), including its subsidiary Jaypee Infratech, had overdue principal and interest repayments of nearly Rs 4,500 crore to banks at the end of March, its auditor said. JAL’s interest and principal repayments were overdue for up to 269 days (almost nine months), auditor MP Singh & Associates noted in its report that came with the company’s annual results announced late last month.
Jaypee group, which has interests in power, cement, infrastructure and real estate, has been battling poor finances and has been forced to sell several of its assets to overcome a debt strain. Its real estate projects in Noida are running severely behind schedule. Majority of people who had booked apartments, villas and plots five-six years ago are awaiting delivery. The delayed repayments occurred despite the group transferring land bank and its headquarters to lenders to clear a part of loan.
The saving grace for the group is that lenders have not declared the loans as non-performing assets despite the major delay in repayment on the ground that Jaypee is due to receive Rs 15,900 crore for the sale of cement plants to Kumar Mangalam Birla’s UltraTech Cement. A loan is declared an NPA if it remains overdue for over 90 days.
The company did not respond to a questionnaire e-mailed on Friday afternoon.
Of the total overdues, around Rs 500 crore relates to Jaypee Infratech, with principal of Rs 300 crore due to Life Insurance Corporation, which decided against refinancing a loan unlike other lenders led by IDBI Bank. The “default” period in this case ranges between 81 and 203 days, said the company’s auditor, R Nagpal Associates.
JAL’s auditor pointed out that the company’s overdue principal repayment added up to Rs 2,900 crore and delayed interest payment was Rs 1,366 crore. JAL’s total debt was estimated at around Rs 21,200 crore at the end of March 2016 and the company said its loss nearly doubled to Rs 3,345 crore during the last financial year.
Jaypee Infra, a JAL subsidiary, had long-term debt of Rs 8,555 crore. Facing pressure from lenders, the Jaypee group is on an asset sale spree to repay debt. Earlier this year, JAL had sold its 17.2 million tonne cement manufacturing plants to UltraTech but the closure of the deal was delayed due to late passage of amendment in Mining And Mineral Development Act, which allows transfer of dedicated mines along with a cement plant.