Mumbai: Axis Bank Ltd, a lender to Jaypee Infratech Ltd, has taken possession of the debt-laden company’s headquarters in Noida, said three people familiar with the development. The bank has decided to take ownership of the asset in lieu of Rs.700 crore owed by the company, said one of the people cited above.
A second person confirmed that the decision to transfer the ownership of the building was taken as a way to reduce debt on the company’s balance sheet.
After the transfer of ownership, a bank can monetize the asset to reduce debt even before the firm defaults.
The Jaypee Group’s headquarters are based out of Nirman Sadan on Noida-Greater Noida Expressway.
Asked for a comment, a Jaypee Group spokesperson said: “No such information.”
This is not the first instance where banks are taking over assets of Jaypee Infratech against pending loans.
Last week, Mint reported that lenders to Jaypee Infratech had taken control of additional parcels of land along the Yamuna Expressway. In January, Jaypee Infratech had transferred ownership of 250 acres to lenders.
Jaypee Infratech’s stand-alone debt associated with the Yamuna Expressway stood at Rs.8,768.54 crore as on 30 September.
The integrated Yamuna Expressway project includes the construction, operation and maintenance of the expressway and the rights to develop more than 6,175 acres of land along it.
Jaypee Infratech is developing five townships on this land.
In November, Mint reported that the Jaypee Group is in talks to sell its entire holding in the expressway project, after a year-long effort to sell a partial stake in the asset failed to materialize. The debt-laden group was in talks with infrastructure-focused funds—IDFC Alternatives and I Squared Capital—for the sale.
At a consolidated level, the Jaypee Group had an estimated debt of Rs.75,000 crore at the end of 31 March 2015, according to the 21 October edition of Credit Suisse AG’s House of Debt report. Bankers have been pushing it to sell assets to reduce debt.
On 30 March, UltraTech Cement Ltd closed a deal to buy the cement division of group firm Jaiprakash Associates Ltd for Rs.15,900 crore. In the past two years, Jaypee Group has already sold two hydropower projects in Himachal Pradesh; cement assets in Gujarat, Jharkhand and Haryana; and wind power assets in Gujarat and Maharashtra.