Jaypee Associates secures 92% approval for $120 million bond restructuring

Jaiprakash Associates, a prominent player in the cement and construction industries, has announced a significant breakthrough in its efforts to address its financial challenges. The company revealed that 92 per cent of its bondholders have consented to the restructuring of its foreign currency convertible bonds (FCCBs) valued at $120 million, originally slated for payments in 2020 and 2021.

The development comes after Jaiprakash Associates unveiled its intentions to restructure these bonds in February, signalling a proactive approach to tackle its debt burden. Following this announcement, on February 27, the company informed stakeholders that it had successfully executed a non-binding term sheet and related accession agreements with approximately 70% of the holders of two key FCCB tranches: the $38,640,000 FCCBs due in September 2021 (Series A Bonds), and the $81,696,000 amortizing FCCBs due in September 2020 (Series B Bonds).

In a recent regulatory filing, Jaiprakash Associates disclosed that additional bondholders have lent their support to the restructuring plan by signing accession agreements with the company. As of now, the company has secured agreements with an impressive 93.99% of Series A Bond holders and about 91.67% of Series B Bond holders, collectively totalling 92.57% of the combined holders of both bonds.

The proposed restructuring process entails the passage of necessary resolutions by relevant bondholders and amendments to the existing trust deed governing these bonds. However, the successful execution of this plan is contingent upon various approvals, including those from the company's shareholders, the Reserve Bank of India, and other legal and statutory authorities.

Amid its financial struggles, Jaiprakash Associates has pursued strategic initiatives to alleviate its debt burden, notably through the divestment of its cement plants in recent years. The latest development reflects the company's commitment to addressing its financial challenges and restoring stability to its operations.

(With PTI inputs)