Vedanta shares in focus as co emerges as highest bidder for Jaiprakash Associates

Shares of Vedanta are likely to be in focus on Monday, September 8, after the mining conglomerate emerged as the highest bidder for debt-ridden Jaiprakash Associates Ltd (JAL).

According to previous reports by ET, Vedanta has proposed a net present value (NPV) offer of Rs 12,505 crore under a resolution plan submitted to the National Company Law Tribunal (NCLT).

As part of the plan, Vedanta has offered to make an upfront payment of Rs 4,000 crore following the approval of the NCLT. The remaining amount were to be paid over a staggered timeline of five to six years.

ET, citing sources, stated that the initial payment of Rs 4,000 crore would be disbursed after NCLT clearance, a process which may itself take up to a year. The balance payments are likely to be spread across a 5–6 year window, the source added.

The company’s bid beat out other competitors, including Adani Group, Dalmia, Jindal Power, and PNC Infratech, in a challenge process conducted by the resolution professional. The Committee of Creditors (CoC), led by the National Asset Reconstruction Company Limited (NARCIL), has identified Vedanta as the H1 (highest) bidder.

However, the final approval is pending and will be subject to a vote by the CoC. The resolution plan, once approved, may take another 4 to 8 weeks for a decision and an additional 3 to 4 months for implementation.

The staggered payment mechanism will be backed by Vedanta’s own balance sheet as well as internal accruals from JAL’s operations.

Vedanta operates power projects like Talwandi Sabo and Meenakshi Energy, and expects operational synergies with JAL’s cement, power, and real estate portfolios. A source quoted in the report indicated that Vedanta also aims to tap into JAL’s limestone and coal mining assets to strengthen its existing businesses in metals, mining, and power.

Also read: Vijay Kedia's Big Bets: 6 stocks surge up to 45% in 5 months — Do You Own Any?

JAL is currently undergoing the Corporate Insolvency Resolution Process (CIRP) under the Insolvency and Bankruptcy Code (IBC). As of August 15, the company had unpaid dues amounting to Rs 55,371.21 crore, according to a stock exchange filing. Its operations span multiple sectors, including power, real estate, cement, hotels, and EPC (engineering, procurement, and construction).

Shares of Vedanta, on Friday, closed 2.3% higher at Rs 445.50 on the BSE.

(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)