Adani Wins Creditor Approval to Acquire Bankrupt Jaiprakash Associates
Adani Group won nearly unanimous creditor support for its takeover plan, which was favored mainly for offering a stronger upfront payout.
Higher Immediate Payout Helps Adani Edge Ahead
Adani Group has obtained formal approval from the Committee of Creditors to take over the distressed Jaiprakash Associates. The approval follows a Letter of Intent issued by the resolution professional to Adani on November 19, which cleared a crucial milestone in the continuing insolvency resolution process. This puts Adani Enterprises in place to assume charge of the conglomerate’s diversified businesses after obtaining final approvals.
Although Adani’s bid presented a lower net present value than the competing proposals, the creditors favored it for its substantially higher upfront payment. This upfront amount proved pivotal in determining the CoC’s voting outcome, which was highly biased toward Adani. Almost 89% of the creditors voted in its favor, signaling tremendous confidence in Adani’s financial structure and its immediate value.
The total value of the offer by Adani works out to approximately ₹14,535 crore. Of this, an amount of ₹6,005 crore will be paid upfront, while the balance ₹7,600 crore is scheduled to be disbursed over two years. In NPV terms, the offer is valued at close to ₹12,000 crore. Legal challenges could still arise as there were rival bidders who had offered a higher valuation over all.
If the takeover goes well, Adani will own Jaiprakash Associates’ businesses across cement, power, engineering, construction, realty, fertilisers, and hospitality. Still, regulatory permissions and various litigation processes may be required for the execution of the resolution plan. The decision against Jaiprakash Associates follows a delinquency of approximately ₹55,000-₹59,000 crore, thus making it one of the largest insolvencies in the country.
