Creditors of Indian conglomerate Jaypee Group have invoked debt restructuring provisions that allow them to convert loans into equity, turning them into the firm’s majority shareholders, reports the Economic Times.
Jaypee Group is struggling under debts of INR582.5bn (US$8.7bn) and had agreed to sell its cement unit to UltraTech Cement to raise capital. Following the move by banks, UltraTech is understood to have written to the Gaur family – who founded and still run Jaypee – questioning why they had not notified anyone of the banks’ decision.
UltraTech has agreed to pay INR159bn (US$2.37bn) for 21.2Mta of cement capacity. When contacted by the Economic Times, an UltraTech spokesperson insisted that the deal remained “on course”.