JP Associates surges as ICICI Bank says cement units sale to be concluded soon

Shares of Jaiprakash Associates were trading strong after its lender ICICI Bank said the debt to the company could soon be concluded as its planned sale of cement units was moving well.

“A large case that one could talk about is the Jaiprakash Associates’ cement assets sale to Ultratech. That is moving well in terms of regulatory approvals,” ICICI Bank’s MD and CEO Chanda Kochhar told CNBC TV18 in an interview.

JP Associates shares rose 1.24% to Rs 13.93 after surging as high as over 4% to Rs 14.4.

Jaiprakash Associates is selling cement assets to pare large amount of debt it owes to several lenders, including ICICI.

Earlier last year, Aditya Birla group company Ultratech Cement agreed to buy JP Associates’ 17.2 million tonne cement units for Rs 16,189 crore and a 4-million tonne grinding unit for additional Rs 470 crore, after a prolonged period of uncertainty.

Kochhar said ICICI Bank would soon see two-three large deals concluding soon, which would ease some pressure on its stressed assets.

“We are quite hopeful that one-by-one those deals should be concluded,” Kochhar said.

JP Associates has a consolidated debt of over Rs 95,000 crore on its books.

The JP-Ultratech deal went through a long period of uncertainty due to tough negotiations between both the parties, with the Aditya Birla group company trying to drive the value of the deal down from the originally-agreed Rs 15,900 crore. Fearing that the deal would fall through, JP’s lenders led by ICICI Bank agreed to start strategic debt restructuring of the company’s outstanding loans.

However, now with the revised deal on its course to completion, ICICI Bank hopes to recover some of its dues from the infrastructure and construction giant.

ICICI Bank