In a significant development in India's corporate landscape, Adani Enterprises has emerged victorious in the battle for bankrupt infrastructure giant Jaiprakash Associates, securing unanimous creditor approval for its $1.53 billion takeover proposal.
The Battle for Jaiprakash Associates
Creditors of Jaiprakash Associates have thrown their weight behind Adani Enterprises' 135-billion-rupee ($1.53 billion) takeover bid, preferring it over competing offers from Vedanta and other prominent players. The decision, reached on Wednesday according to officials familiar with the matter, marks a crucial step in resolving one of India's largest ongoing bankruptcy cases.
The creditor committee, comprised mostly of Indian banks, made their choice despite Vedanta's higher financial offer of 170 billion rupees. The preference for Adani's bid stemmed from its more favorable payment structure, which included larger upfront payments that appealed to stakeholders seeking quicker returns on their investments.
Why Adani Prevailed Over Higher Bidders
The payment timeline proved to be the decisive factor in this high-stakes corporate acquisition. While Vedanta proposed a five-year payment schedule, Adani Enterprises committed to completing payments within 1.5 to 2 years, significantly reducing the waiting period for creditors.
"Creditors have voted in favor of Adani. Now the committee of creditors will take a final decision, likely reaffirming this outcome, and submit it to the National Company Law Tribunal (NCLT)," revealed one of the officials involved in the process.
The bidding landscape was competitive, with several major Indian corporations vying for the infrastructure group. Besides Adani and Vedanta, other contenders included Dalmia Bharat, Jindal Power and PNC Infratech. Adding to the drama, controlling shareholder Manoj Gaur submitted a last-minute bid that was subsequently withdrawn.
Background and Next Steps
Jaiprakash Associates, once counted among India's infrastructure powerhouses, owes creditors a staggering 550 billion rupees. The company entered insolvency proceedings under India's bankruptcy laws in June last year, initiating one of the most significant corporate resolution processes in recent memory.
The National Asset Reconstruction Company (NARCL) plays a pivotal role in this resolution. Having acquired Jaiprakash's loans from a lender consortium led by State Bank of India, NARCL now leads the list of claimants in the ongoing resolution process.
With creditor approval secured, the focus now shifts to the formal procedures that will finalize the acquisition. The committee of creditors is expected to ratify the decision before submitting the resolution plan to the NCLT for final approval, potentially marking the conclusion of this extensive corporate saga.
