A security guard walks towards residential buildings under construction at the Jaypee Wish Town Project. (Photographer: Prashanth Vishwanathan/Bloomberg)

ICICI Bank Files Insolvency Petition Against Jaiprakash Associates

ICICI Bank Ltd. moved the National Company Law Tribunal with an insolvency petition against the debt-ridden infrastructure services firm Jaiprakash Associates Ltd.

The private lender has filed a corporate insolvency petition against the company under section 7 of the Insolvency and Bankruptcy Code, according to a stock exchange filing by the infrastructure firm. The petition was filed at the Allahabad bench of the tribunal.

Lenders to the Manoj Gaur-led firm have been forced to invoke insolvency proceedings after the Reserve Bank of India rejected a request for restructuring the company’s debt outside the bankruptcy court. Jaiprakash Associates was part of the RBI’s second list of stressed assets, sent in August 2017, that needed immediate insolvency action. The Supreme Court had stayed insolvency proceedings as the tribunal was already dealing with one of the firm’s subsidiaries, Jaypee Infratech Ltd. Earlier this month, the apex court allowed the central bank to continue with the insolvency process.

Also read: Why JP Associates May Finally Face Insolvency Proceedings

The firm said it has been given seven days to reply to the petition. The matter has been listed at the tribunal for hearing on Sept. 17.

The infrastructure firm owed Rs 31,522 crore to its lenders as on March 31, 2017, according to its annual report. In June 2017, it had sold its cement units to UltraTech Cement Ltd., which is likely to have reduced debt by at least Rs 10,000 crore.

Jaiprakash Associates closed 3.7 percent lower, ahead of the petition filing, on the BSE on Monday.