Bankers led by ICICI bank acquired controlling stake at Jaiprakash Power Ventures

MUMBAI: Bankers led by ICICI Bank have acquired controlling stake in Jaiprakash Power Ventures after the company defaulted on repayment of loans. The move will also reduce company’s debt by Rs 3058 crore. Shares of the company rose by 4.70 per cent to close at Rs 6 a piece at Bombay Stock Exchange.

Prior to the conversion of debt into equity lenders had an exposure of Rs 25,000 crore in the company. Following the conversion of debt into equity, 23 banks were allotted 305 crore shares in the company.

Lenders now have 51 per cent stake in the company, this includes ICICI Bank holding 13.7 per cent, IDBI Bank at 5.3 per cent, Punjab National Bank at 4.4 per cent stake, Central Bank of India at 4.1 per cent and State Bank of India at 3.5 per cent. Other lenders with stake in the bank includes Bank of India, IDFC Bank, Canara Bank and LIC. Promoter’s stake in the company is reduced to 31 per cent from 63.6 per cent in the December 2016. Jaiprakash Associates owned 29 per cent stake in Jaiprakash Power Ventures.

The conversion of debt into equity shares is done under strategic debt restructuring (SDR) scheme, which gives lenders the right to acquire majority equity stake in a defaulting company at the prevailing market price and subsequently sell their stake to a prospective buyer. Lenders had initiated SDR in the company in July 2016 itself.

Over the last two years, lenders have initiated SDR in over two dozen companies with the intension to revive the financially ailing companies by finding a new promoter. However, bankers have been able to find buyers for their stake only few companies such as ABG Cement and Gammon.