JAL creditors opt for Adani offer: Chosen over higher Vedanta bid due to better prepayment terms

Jaiprakash Associates’ creditors voted unanimously in favor of Adani Enterprises, pitting Vedanta against its bid for the bankrupt diversified infrastructure conglomerate, people with knowledge of the development said.

Vedanta had emerged as the highest bidder for Jaiprakash Associates Limited (JAL) with a bid of ₹17,000 crore in the electronic auction held in September. But lenders preferred Adani Enterprises because it offered higher down payments, according to people.

They said the net present value of Adani Enterprises’ bid was lower by around ₹ 500 crore compared to Vedanta’s bid. However, ET could not ascertain the exact bid amount quoted by Adani. One person described the difference in overall plan value between the two parties as “significant.”
Voting ended at 21:00 on Tuesday.

In the scorecard prepared by the committee of creditors last week, the highest score was given to Adani Enterprises. His proposal was scored out of 100. But some lenders objected to the scoring mechanism, according to people with knowledge.
National Asset Reconstruction Company is the largest creditor of Jaiprakash Associates.
JAL owes ₹55,000 crore to creditors. The company filed for bankruptcy in June last year. It is led by Deloitte-backed solutions expert Bhuvan Madan. He did not respond to ET’s questions.
One of the people cited earlier, who requested anonymity, said the lenders’ decision to vote for Adani Enterprises could be legally tested because it is not the highest bidder. However, courts have generally upheld the business wisdom of lenders in making choices regarding the resolution of stressed accounts.

Solution plans were initially submitted by five players. Apart from Adani and Vedanta, Dalmia Bharat also included Naveen Jindal’s Jindal Power and PNC Infratech. Dalmia Bharat had initially emerged as the highest bidder but its bid was said to be conditional. He did not participate in the subsequent electronic auction.

ET had reported earlier this month that JAL’s promoters, led by Manoj Gaur, had offered a ₹18,000 crore settlement to creditors to bring the company out of bankruptcy.

However, creditors felt that Gaur had failed to provide sufficient evidence of financial support for his bid. Jaiprakash Associates, the flagship of the Jaypee Group, has a portfolio ranging from cement, energy, engineering and hospitality to real estate and sports infrastructure. The sports city project in Greater Noida is spread over 1,000 hectares.