The Competition Commission of India (CCI) has granted in-principle approval to the Gautam Adani Group for the acquisition of debt-ridden Jaiprakash Associates. This approval for the Adani Group will be applicable upon winning the insolvency process. Dalmia Bharat has also received approval for the acquisition.
Jaiprakash Associates: The Competition Commission of India (CCI) has given in-principle approval to the Adani Group for the proposed acquisition of debt-laden Jaiprakash Associates. The Adani Group can acquire up to 100 percent shareholding in this acquisition, provided it is successful in the insolvency process. Dalmia Bharat has also received similar approval. Jaiprakash Associates has been a major company operating in the real estate, cement, energy, and hotel sectors, which is undergoing insolvency resolution process under NCLT due to loan defaults.
Dalmia Bharat Also in the Race Besides Adani
In addition to the Adani Group, Dalmia Bharat has also received approval from the CCI for the acquisition of Jaiprakash Associates. Following a recent Supreme Court decision, companies are now required to obtain CCI approval before submitting a resolution plan under the Insolvency and Bankruptcy Code (IBC). Only after this approval will the plan be finalized through a vote by the Committee of Creditors (CoC).
The Adani Group has proposed an upfront payment of over ₹8,000 crore for this acquisition. This move is strategically important for the company, as other major companies have also been in the race to acquire it.
Company Under Heavy Debt of ₹57,185 Crore
Jaiprakash Associates Limited has been a major company operating in the real estate, cement, energy, and hotel sectors. However, following defaults in loan repayments, the company was admitted into the corporate insolvency resolution process by the National Company Law Tribunal (NCLT), Allahabad Bench, on June 3, 2024.
The company's creditors claim that Jaiprakash Associates has a staggering debt of ₹57,185 crore. Due to this, trading in the company's stocks has been suspended, and its share price has plummeted from ₹300 to just ₹3.80 per share.
Who is in the Acquisition Race?
Besides the Adani Group and Dalmia Bharat, companies like Vedanta, Jindal Power, and PNC Infratech have also been in the race to acquire Jaiprakash Associates. These leading companies have worked on their respective bids and strategies for this acquisition.
Experts say that this strategy of the Adani Group could potentially bring about a major change in the Indian corporate world. The acquisition will give the Adani Group the opportunity to further expand in the real estate, energy, and hotel sectors.
CCI Approval
CCI approval is considered important because it reduces regulatory hurdles in the acquisition process. According to the Supreme Court's order, it is now mandatory for any company to obtain CCI approval before entering the insolvency process. This process is considered necessary for the protection of the interests of financial lenders and investors.
Adani's Proposal
The Adani Group has proposed an upfront amount of over ₹8,000 crore without any preconditions. Experts say that if the Adani Group succeeds in the insolvency process, it will create opportunities for the company's financial improvement and new projects in the future.
