Only Ambuja in fray for Jaypee Cement, submits Rs 580 crore bid

Adani Group-backed Ambuja Cements has submitted a Rs 580-crore offer to acquire bankrupt Jaypee Cement Corporation. The only other bidder, My Home Group, exited the process after submitting Rs 300-crore bid, reports Sangita Mehta. However, the insolvency resolution hangs in balance, as the Ambuja bid is well below the Rs 880 crore liquidation value. Lenders are negotiating with Adani Group for a higher offer.

Ambuja for Jaypee Cements

Lenders had last year rejected a Rs 227 crore offer from National Asset Reconstruction Co (NARCL) for Jaypee Cement’s debt, terming it too low, the people added. Earlier, the National Company Law Tribunal approved the Adani Group’s Rs 14,535 crore resolution plan for Jaypee Associates. The offer was supported by majority lender NARCL with an 85% voting share. Lenders then rejected a rival bid from Vedanta that offered Rs 3,400 crore higher in value, according to court documents. Under insolvency rules, the RP appoints two valuers to determine the fair value and liquidation value of a company, with the average serving as a benchmark for sale.

The liquidation value represents what lenders may recover if assets are sold piecemeal, while the fair value reflects the expected price if the business is sold as a going concern. Typically, lenders favour liquidation if bids fall below the liquidation value. Jaypee Cement’s resolution professional has admitted Rs 3,361 crore of claims, comprising Rs 2,892 crore from secured creditors and Rs 469 crore from unsecured creditors, according to the Insolvency and Bankruptcy Board of India website.

The company was admitted into corporate insolvency in July 2024 following a petition by State Bank of India. Jaypee Cement has an integrated cement capacity of five million tonnes per annum and owns two captive power plants — a 35 MW unit at Jaggayyapet in Andhra Pradesh and another 25 MW unit under implementation at the same site. Operations at its 1.2 MTPA cement plant at Shahabad in Karnataka, along with a 60 MW captive power plant, are currently suspended.