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News Topical, Digital Desk : Shares of mining company Vedanta Limted are going to be in focus on Monday. The company has given information about a big development, after which preparations for action are being seen in the stock. Actually, Vedanta Limited has won the bid of Rs 12,505 crore to buy debt-ridden Jaiprakash Associates Limited (JAL).
Vedanta has won this bid by defeating Adani Group. In this, Rs 4,000 crore will be paid after the approval of the National Company Law Tribunal (NCLT) and the remaining amount will be paid in the next 5-6 years.
First understand the whole matter...
Jaiprakash Associates (JAL) has a debt of Rs 55,371.21 crore. JAL is undergoing Corporate Insolvency Resolution Process (CIRP) under the Insolvency and Bankruptcy Code (IBC). On June 24, the resolution professional had sought resolution plans. In the challenge process between five companies (Vedanta, Adani, Dalmia, Jindal Power and PNC Infratech), Vedanta placed the highest bid (H1) with a net present value (NPV) of Rs 12,505 crore.
What is this entire payment process? Vedanta will make the first payment of Rs 4,000 crore after the approval of NCLT. This may take about a year. The remaining amount will be paid in 5-6 years. This payment will be made from Vedanta's balance sheet and JAL's internal income, so that there is no excessive burden on Vedanta.
How long will the process take? Vedanta has been selected as the H1 bidder. But, the Creditors Committee (CoC) may take 4 to 8 weeks to take a final decision and vote on the resolution plan. After this, it will take another 3 to 4 months to implement the plan.
Know about JAL's business JAL mainly operates in the power, real estate, cement, hotels and EPC (engineering, procurement, construction) sectors. These are compatible with Vedanta's existing businesses (metals, mining and power). Vedanta's power projects, such as Talwandi Sabo and Meenakshi Energy, will be strengthened by JAL's power projects. JAL's lime stores and coal mines will also be leveraged. Also, the separation of Vedanta's power business will give JAL's power business more strength. There is also scope for growth in real estate through partnerships.
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