Lenders to Jaiprakash Power Ventures (JPVL) are looking to sell at least a 30 per cent stake in the company and have mandated SBI Capital Markets and consultancy firm EY to scout for a buyer, according to a document seeking investors.
“The core committee (CC) on behalf of the joint lenders’ forum (JLF) of the Company has appointed SBI Capital Markets and EY, collectively referred to as ‘advisors’ to assist in sale of minimum 30 per cent equity stake held by the consortium lenders,” it said.
JPVL’s standalone debt stood at Rs 9,609 crore in FY17 and it reported a net loss of Rs 761 crore on revenues of Rs 2,879 crore in the same period. While it was not possible to ascertain the valuation of the company, it is expected that the stake could be valued at a little more than one-third of the company’s enterprise value.
According to Bloomberg, the enterprise value of the company stood at Rs 12,560 crore in FY17, thereby valuing a 30 per cent stake at Rs 3,768 crore.
The advertisement added that banks and financial institutions currently hold a 51.8 per cent stake, acquired under the strategic debt restructuring (SDR) process, and Jaiprakash Associates,the holding company, owns 29.7 per cent. While State Bank of India (SBI) is the lead bank in JPVL’s 400 MW hydro-power project, IDBI Bank and ICICI Bank lead the 500 MW and 1,320 MW thermal power projects, respectively.
Rating agency CARE had downgraded the long-term bank facilities of JPVL to default rating in 2016, citing delays in debt servicing due to its weak liquidity. The company had also said that its lenders decided to convert debt into equity using the Reserve Bank of India’s SDR norms in July last year. JPVL is in the business of power generation and has a presence in the power transmission business through its 74 per cent subsidiary Jaypee Powergrid, which has set up a 214-km transmission line.
Bankers to JPVL include SBI and its subsidiaries, Bank of India, Canara Bank, Punjab National Bank, IDBI Bank, ICICI Bank, UCO Bank, Union Bank of India and Central Bank of India, among others. The company is led by Manoj Gaur as the chairman, Sunil Kumar Sharma as vice-chairman and chief executive officer, and Suren Jain as managing director and chief financial officer. FE