Vedanta seeks CCI nod to acquire debt-laden Jaiprakash Associates

Mining giant Vedanta has sought the Competition Commission of India’s approval for its proposal to acquire 100% in stressed infrastructure firm Jaiprakash Associates (JAL).

Vedanta has emerged as the highest bidder to acquire JAL under the corporate insolvency resolution process (CIRP) with a net present deal value of Rs 12,505 crore, beating Adani Group’s offer.

Under the insolvency law, the CCI’s clearance is a must before resolution plans by suitors are approved by the committee of creditors of the stressed company.


In a filing with the antitrust regulator dated September 11, Vedanta has said the proposed transaction “is not likely to cause any appreciable adverse effect on competition in India”.

In June last year, the National Company Law Tribunal had directed the initiation of insolvency proceedings against JAL.

“The proposed transaction is being undertaken in furtherance of the resolution plan submitted by Vedanta in connection with the CIRP of JAL,” Vedanta said in the filing.

Vedanta has reportedly proposed to pay Rs 3,800 crore upfront and Rs 2,500-3,000 crore annually over the following five years. This could eventually take the cost of acquisition to about Rs 17,000 crore, while the net present deal value is pegged at Rs 12,505 crore.

Financial creditors, who form the CoC, have claimed Rs 57,185 crore in unpaid dues. The National Asset Reconstruction Company leads the pack of claimants after acquiring the stressed JAL loans from a consortium of lenders led by State Bank of India.

JAL, which is listed on both BSE and National Stock Exchange, is an infrastructure and industrial company engaged in diverse business activities, including real estate, cement, hospitality, engineering, procurement, and construction contracting. Certain group companies of JAL are also engaged in business in the power, fertiliser, sports and aviation segments.

On September 10, CreditSights, a Fitch Group firm, said in a note that Vedanta's proposed acquisition of JAL is credit negative due to "little strategic synergistic rationale".