JAL Insolvency: The bankrupt company has finally been transferred to the name of Adani Group. Creditors of Jaiprakash Associates Limited (JAL) have selected Adani Enterprises as the buyer of JAL. According to an Economic Times (ET) report, JAL’s lenders ultimately chose Adani Enterprises because its upfront payment was higher, even though Adani’s net present value was about Rs 500 crore less than Vedanta’s Rs 17,000 crore bid during the electronic auction process.
Many other big names were involved in the race
Officials familiar with the matter said that Jaiprakash Associates’ creditors mostly included Indian banks, which supported Adani Enterprises’ takeover proposal of Rs 135 billion or $1.53 billion instead of Vedanta’s Rs 170 billion and considered it better than Vedanta’s bid. Apart from Adani and Vedanta, other bidders in the race were Dalmia Bharat, Jindal Power and PNC Infratech. An official said that controlling shareholder Manoj Gaur had also made a bid at the last moment, which was later withdrawn.
JAL’s largest lender
National Asset Reconstruction Company is the biggest lender to Jaiprakash Associates, which owes around Rs 55,000 crore and has been in insolvency since June last year. Bhuvan Madan of Deloitte is overseeing the process as JAL’s resolution professional. In this voting held on Tuesday, questions are being raised regarding the scoring method that how Adani came ahead in the race despite bidding less?
Many came forward to buy JAL
Earlier, five bidders had submitted plans to buy JAL, which included Adani, Vedanta, Dalmia Bharat, Jindal Power and PNC Infratech. Dalmia Bharat was initially at the forefront. Then it was told that the company did not participate in the e-auction later because the proposal was conditional.
Earlier this month, JAL promoter Manoj Gaur had also proposed a settlement of Rs 18,000 crore, but the lenders felt that he did not have proper proof of funding. Jayaprakash Associates, the flagship company of Jaypee Group, works in cement, power, engineering, hospitality, real estate and sports infrastructure, including a 1,000-hectare sports city in Greater Noida.
A major stumbling block in the insolvency process is the 1,000-hectare sports city, which is under legal scrutiny. Yamuna Expressway Industrial Development Authority (YEIDA) had canceled JP’s allotment in 2019, citing default of more than Rs 500 crore and lease violation. The CAG audit also revealed major irregularities in the allotment process.
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