Valuation Model: JAL’s Base Case Distributable Value Under Insolvency Estimated at INR 8,801 Crore; Secured Debt Value Leaks to Unsecured Creditors in Proposed Restructuring

 
Relevant Documents:
Valuation/Recovery Model on Reorg Analysis Page
Tear Sheet on Reorg Analysis Page
FY’17-18 Report
FY’16-17 Report

With Jaiprakash’s fate influx and at the hands of the National Company Law Tribunal (NCLT) decision pushed to Jan. 23, creditors are faced with a wide range of scenarios that need to be taken into account. Should the NCLT Allahabad bench choose to hear and eventually sanction ICICI’s petition seeking insolvency proceedings, Reorg estimates base case JAL distributable value at INR 8,801 Crore. This translates to 49.2% recovery factoring in a significant discount to the group’s real estate assets. However, should the court sanction the proposed restructuring, INR 10,630 Crore of secured debt will be hived off to a SPV with only recourse to the real estate assets which carry what we see as option value. The remaining INR 7,741 Crore which includes INR 1,719 Crore of unsecured debt will be nearly fully covered under Reorg’s base case valuation excluding all land value.

Reorg’s valuation model, accessible in excel, can be found HERE on our datapage.

The company does not disclose which exact facilities will be transferred into the SPV. Assuming that all secured lenders are treated equally and proportional share of each loan is transferred over into JIDL, the real estate SPV, recovery profile of the secureds will suffer to the benefit of the unsecured lenders. This is because the revenue generating cement and hotel assets as well as the EPC division, which the company wants to strengthen going forward, will lie in the restructured vehicle. Assuming the total value of the group unchanged, the base case recovery to secured lenders falls by INR 1,438 Crore.
   
Reorg’s previous coverage of Jaiprakash can be accessed HERE.

Capital Structure:

As per the latest annual report for year ended March 31, the company had INR 19,833 Crore of debt outstanding of which INR 12,091 Crore of debt was designated to be hived off into a real estate vehicle. For our analysis - we assume that the debt transferable to JIDL as a part of the restructuring scheme is secured in case the restructuring scheme is not implemented. We assume this on the basis that the company had INR 28,636 Crore of debt outstanding as of financial year 2016-2017 of which INR 22,305 Crore was secured. The delta across the years is primarily driven by the sale of cement assets to Ultratech. Given that the company only provides debt breakdown pro forma for the restructuring, it is unclear which bank facility were paid down.

As per the 2016-2017 financial report, the non-convertible debentures and bank loans share first lien security over all moveable and immovable fixed assets of the company except for assets pertaining to real estate division and certain fixed assets specifically charged to state government and state financial institution. The loans were also secured by land belonging to Infratech. Furthermore, certain bank facilities benefit from additional liens predominantly on the land assets of the company. Detailed breakdown of the security packages as per 2016-2017 report can be found in the appendix.
 

At Sept. 30, the company’s liabilities looked as follows with no detailed overview of the individual facilities. Once again, similar to the 2017-2018 annual report, the company breaks down its liabilities pro forma for the proposed restructuring.
 

Corporate structure of the company looked as follows.
   
Valuation Summary:

Reorg calculates that the value of Jaiprakash Associates (JAL) in the base case is INR 8,801 Crore translating in secured creditor recovery of 49.2% inclusive of 6.8% recovery from land. However, if we apply 100% discount to value of any land which rests at JAL, the recovery value falls to 42.4%. In the low case, recovery inclusive of land stands at 41% and 34.9% otherwise, while upside case sees secured creditors recovering 64.1% of their claims. This falls to 56.6% if 100% discount is assigned to any potential recovery from land.

Recovery if the restructuring does not go through looks as follows.
 

If the restructuring were to go through, the recovery profiles would change as follows.
 

There is further potential of recovery for certain creditors which had additional liens predominantly on land of the company and its Infratech subsidiary. In order to determine this further potential recovery, we use the data on amounts outstanding under each of the facilities from the 2016-2017 report absent of any more recent disclosure. We then cross checked and corrected certain individual securities as per the 2017-2018 report, though the amounts outstanding remained unchanged. It is possible that some of these balances could have been discharged as part of the asset disposal to UltraTech on June 29, 2017 or paid down in the period and as a result, the “additional value available to certain creditors from JAL Liens” could be overstated and instead the amount will be available to the overall group. We allow to correct for this through a toggle available in the model which would make the base case INR 425 Crore of value available to the whole group.

Additional value to certain creditors can be recovered through specific liens on Infratech land. We reduce the value of Infratech accordingly.

Summary of additional recoveries to certain lenders can be found in the appendix.

Further consideration is INR 1,520 Crore of second lien secured debt that the company had as of 2016-2017. However, we do not know whether this has been repaid and as a result, we also toggle for a scenario where this value is outstanding in the model. In our base case, we assume all of the secured debt is first lien.

In order to value the parent company, we employed sum of the parts valuation. In doing so, Reorg looked at each subsidiary and asset of the group, valued these on a standalone basis, and determined the amount of value to flow up to JAL following repayment of structurally senior creditors.
 

JAL:

The five main segments comprising JAL are cement, power, construction, hotels, and real estate. We valued the four segments excluding real estate through either transaction multiples or market comparables and we then looked at the land bank at JAL to value any potential upside stemming from the real estate segment.

We also factor in arbitration claims at JAL level and receivable from UltraTech. The UltraTech INR 1,000 Crore receivable is in the form of redeemable preference shares issued by UltraTech pertaining to conditions precedent related to JP Super Plant in Uttar Pradesh. Across all cases, we assume full INR 1,000 Crore flowing to the the lenders.

JAL also had INR 2,645 Crore in arbitration claims raised on the JAL’s engineering and construction clients in respect of closed, suspended, and under construction projects as of March 31. Annual report states that management considers these “fully recoverable”. However, for the purpose of valuing this company as distressed, we assign no value to this in base and downside case. In the upside case, we give this claim 50% recovery potential. If recovered in full, this would provide additional 14.8% in recovery.

Furthermore, Infratech pledged 858 acres of land to lenders extending credit to JAL of which 455.7 acres were for specific lenders. As a result, we assign the value of 402.3 acres to JAL, 455.7 to individual lenders, and reduce land available to Infratech by 858 acres. We value this using the same methodology as JAL and Infratech land outline below.

JAL Cement:

At JAL level, the group has 5.05 million tonnes per annum (MTPA) in grinding capacity split between the following two assets. 2.55 MTPA at central zone which also include 62 MW of captive thermal power and clinker production and 2.5 MTPA at UP Zone with 217 MW of captive thermal power of which 60 MW was under implementation as of 2017-2018 year end with no clinker production. We first value the cement assets and look at the power assets separately.

In order to value these assets, we looked at precedent transactions of assets with comparable specifications. For the 2.55 MTPA asset at central zone with clinker production, we used enterprise value multiple of INR 650 Crore per MTPA and sensitised it at 5%. The multiple used for valuation compares to INR 763.6 Crore achieved in the JCCL transaction and the implied INR 659.1 Crore multiple based on the failed Bhilai transaction. The general benchmark price of $100 per tonne per annum stands at INR 707.4 Crore per MTPA.

This gets us to enterprise value of INR 1,658 Crore. We apply no distress discount to this asset reflecting demand for group’s cement assets and reported talks to sell remaining cement business to ACC for INR 5,200 Crore.
 
To value the 2.5 MTPA UP Zone assets with no clinker capacity, we looked at transaction multiples of grinding facilities, namely Nigrie Cement Grinding Unit and Panipat Cement Grinding Unit. Both of these transactions were at value significantly lower than the $100 per tonne benchmark at INR 248 Crore and INR 239 Crore respectively. As a result, we use benchmark multiple of INR 250 Crore per MTPA and arrive at valuation of INR 625 Crore.
 
The implied EV/EBITDA multiple of this valuation is 10.0x, a 22% discount to ACC Limited EV/EBITDA multiple and less than half of that of UltraTech cement and Shree Cement Limited.

Output of the model for cement segment of JAL standalone looked as follows.
 
JAL was reported to be in talks with Lafarge-Holcim controlled ACC Limited to sell its residual cement business for INR 5,200 Crore. The Economic Times India article said that the company is divesting its “entire residual cement asset.” However, the article also stated that the capacity in question is 5.5 MTPA. This is above 5 MTPA at JAL but below 9.6 MTPA capacity at group level. However, assuming that the assets in question span the entire group’s portfolio, the deal valuation compares to INR 4,421 Crore Reorg base case stressed enterprise value for these assets. The unstressed Reorg valuation stands at INR 4,777 Crore in the base case and INR 5,318 Crore in the upside case.

JAL Power:

JAL Power has captive thermal power capacity of 279 MW for its cement plants which includes 60 MW at Churk under implementation. The implemented assets comprise 62 MW at central zone and 157 MW at UP zone. In order to value the assets, we ascribed value of INR 3 Crore per MW for the already implemented assets which translates to enterprise value of INR 657 Crore. We applied further 20% distress discount to reflect the stressed nature of the industry, susceptibility to future regulation, and their value likely depending on the success of the cement assets.

We used multiple of INR 3 Crore given the assets’ small size, compared with NPTC bids for assets at enterprise value of INR 3.5 Crore per MW and below. Even at such low level, the implied EV/EBITDA is high at just over 21x. However, these assets would likely be part of any future transaction including divestment of cement assets justifying the high valuation.
 

Output of the model for power segment of JAL standalone looked as follows.
 
JAL Hotels, Hospitality, and Golf Course:

JAL’s assets in the hotels division comprise five five-star luxury hotels, championship golf course and integrated sports complex. Two of the hotels, 94 room Jaypee Siddharth and 119 room Jaypee Vasant Continental, are in New Delhi. The largest property is 341 room Jaypee Palace Hotel with convention center in Agra and 135-room Jaypee Residency Manor. Jaypee Greens Golf & Spa Resort offers 170 rooms and a spa overlooking the Championship 18-hole Greg Norman Golf Course at Jaypee Greens, Greater Noida, U.P..

In order to value the segment, we looked at local peers in the Indian market; EIH Limited, The Indian Hotels Company Limited, and TAJGVK. EIH Limited operates hotels and cruisers in five countries under the luxury Oberoi and five star Trident brands. The Group is also engaged in flight catering, airport restaurants, travel and tour services, car rentals, project management and corporate air charters.

The Indian Hotels Company Limited manages a portfolio of hotels, resorts, jungle safaris, palaces, spas and in-flight catering services under Taj, Vivanta, Ginger, SeleQtions, and The Gateway brands. The Taj is a luxury brand which operates 47 hotels. Vivanta is the upscale arm of the group with 25 hotels, while Ginger caters to midscale segment with 45 hotels.

We also looked at the TAJGVK Hotels and resorts which is a joint venture, formed through a Strategic Alliance, between the Indian Hotels Company Limited and the Hyderabad based GVK Group. The company owns and operates three five star hotels in Hyderabad and one five star hotel each in the cities of Chennai and Chandigarh.
 

We chose 12.5x EV/EBITDA multiple for the business reflecting a two turn discount to TAJGVK Hotels & Resorts Limited to estimated last twelve month EBITDA. We then applied further 20% discount due to the illiquid nature of the assets to arrive at stressed enterprise value of INR 620.1 Crore.
 
Engineering and Construction:

Engineering and construction is JAL’s arm to execute construction projects predominantly in hyrdropower and irrigation. As per the latests report, order book of the company looked as follows.
 

Furthermore, the company also has a joint venture with Gayatri where JAL has 51% stake. The projects being executed by the JV looked as follows.
 

As seen on the project lists, the company has completed over 20% of only 7 projects with majority at 0% by number which represent projects where the company had the lowest bids but the contracts have not been awarded yet. At the JV level, JAL had 2 projects at 111% and 80% with the third one at 0%. The completion figures are as of March 31, 2018.

In order to value the segment, we took 1 turn discount to 7x EV/EBITDA multiple used by brokers to value Indian EPC companies. Furthermore, we apply further 40% discount as the uncertainties related to solvency of the company might make securing new contracts difficult.  
JAL Subsidiaries:

Bhilai Jaypee Cement Limited:

JAL owns 74% of Bhilai Jaypee Cement Limited. Yes Bank Limited, which is a lender across a multitude of vehicles, invoked a pledge for 113,905,440 shares in Bhilai which represent 30% of its shares outstanding. Yes Bank’s loans at JCCL subsidiary and KFCL subsidiary benefitted from this pledge and any recovery shortfall to Yes Bank at JCCL and KFCL is satisfied through value of the Bhilai shares. The rest is then distributed to JAL.
   
The company holds 2.2 MTPA in grinding unit capacity, 1.1 MTPA clinker plant capacity, and no captive thermal power capacity. We valued the asset at INR 650 Crore per MTPA, in line for the JAL central area cement units. In doing so, we arrive at enterprise value of INR 1,430 Crore which compares to the INR 1,450 Crore in Bhilai sale to Orient which fell through. We then further stress the multiple by 10% downwards reflecting deterioration of the group’s situation and potential need for fire sale of certain assets.
   
We then correct for any cash burned in the first half of the year and subtract INR 62.6 Crore outstanding at the vehicle. The company also has INR 48.4 Crore intercompany loan due to JAL which we assume flows up to the parent before any equity is distributed. As a result, we project INR 920.1 Crore to be available to JAL between equity value and intercompany liability.

Jaypee Cement Corporation Limited:

Jaypee Cement Corporation Limited is a 100% owned subsidiary of JAL with 1.2 MTPA grinding unit, 1.2 MTPA project under development, no clinker capacity, and 60 MW captive thermal power capacity.

We value the company by looking at the grinding unit and power capacity separately. For the grinding unit and power assets, we use same assumption as per the parent company grinding and power assets. Thereafter, we stress the grinding assets at 12.5% reflecting the uncertainty regarding this residual minor asset at JCCL. For the power asset, we apply 25% discount to correct for the small size.
   
The resulting stressed enterprise value stands at INR 660 Crore, barely sufficient to cover the INR 658 Crore capital structure in the base case.
   
The base case equity value available to JAL as a result is INR 29 Crore.

Kanpur Fertilizers and Cement Limited:

The subsidiary holds the groups fertilizer assets comprising 3 urea and ammonia streams, 4 bagging lines, 2 boilers, and hydrolyzer stripper. In order to value the company, we looked at fertilizer assets in India with average EV/EBITDA multiple at about 7x. We then used 6x multiple to correct for the size of the asset and further 20% discount to reflect the group’s situation.
   
The asset carries substantial leverage at INR 830.1 Crore and compares to INR 1,162 Crore of distributable value. As a result, the group’s equity value stands at INR 342.7 Crore. This then flows up to the parent through a series of subsidiaries.
   
Jaiprakash Power Ventures Limited:

JPVL is a publicly traded vehicle which had market capitalization of INR 1,259 Crore as of Dec. 19. JAL holds 29.7% of the vehicle and we apply 17.7% discount to current trading price to arrive at INR 297.2 Crore value due to JAL.

Himalayaputra Aviation:

Himalayaputra Aviation is a civil aviation business of relatively small size compared to the rest of the group. We apply 6.5x enterprise value multiple and distress discount of 25% to the company. Majority of the capital structure is comprised of INR 63 Crore loan from JAL with total value due to JAL projected at INR 106.5 Crore.

Himalayan Expressway:

Himalayan Expressway is a concession for the Zirakpur Parwanoo Expressway until March 8, 2029. We value the asset using 8x EBITDA multiple, in line with peers with 10 years concession length till expiration. We then apply 20% discount to this to reflect the subdued implied multiple of JAL’s proposed Yamuna concession sale.
   
There is INR 327.9 Crore of debt extended to the vehicle which leaves no value for distribution upwards.
   
Jaypee Infratech:

Jaypee Infratech is a listed subsidiary of JAL which is currently also in insolvency. Infratech holds the 165 kilometer Yamuna concession with expiration in 2048, a 504 bed hospital at Jaypee Wish Town, and 5,826 acres of land of which 3,833.8 acres are in the national capital region. 886 Acres were at Noida, 1,235 at Jangapur, 1,235 at Mirzapur, 1,235 at Tappal, and 1,235 at Agra. We subtract 100 acres pledged to the parent group’s creditors from the overall balance to reflect lower value available to the vehicle’s
 

In order to value the company, we valued each of the three assets separately. For the Yamuna concession, we applied a discounted multiple of 10x enterprise value to EBITDA and further stressed this amount by 25%. The resulting enterprise value of the concession was INR 2,049 Crore which compares to the INR 2,500 hive off offer that the company sought approval for in October of 2017.

For the hospital, we assign INR 0.5 Crore enterprise value per bed to arrive at INR 252 Crore. However, we then discount this 50% to factor in the fact that the township has not been completed and the capacity of this asset does not correspond to the current situation of the township.

Lastly, to value the land, we split it in two groups; the national capital region group and the rest. We assign base value of INR 2 Crore per acre which is the value quoted by specialist relating to the 759 acres which was pledged as collateral for JAL (parent) loans. NCLT ordered this land to be discharged as pledge to secure parent loans. We then applied 50% discount to this value to factor in any non-core land which may have lower valuation, illiquidity of the assets, and a distress of the company.

For the land outside of the national capital region, we used base of INR 1 Crore and assumed 50% discount for the same reason.

The overall stressed enterprise value comes out at INR 6,627 Crore. If we exclude the distress discounts, we arrive at INR 9,166 Crore.

On the liability side, homebuyers who did not have their flats delivered have most recently been reinstated as financial creditors. We estimate this liability to be INR 7,156 Crore and the capital structure, inclusive of the homebuyer claims, stands at INR 15,705 Crore.

As a result, we estimate that no value will flow from this vehicle to JAL beyond 100 acres pledged to JAL’s creditors.
   
Appendix:

2016-2017 Standalone Security:

NCDs:

NCDs at the standalone entity are specifically secured by first lien on Mouje Dhanot, Taluka, Kalol, Dist. Mehsana, Gujarat Properties where they have English form legal mortgage.

NCDs and Secured Loans:

The NCDs, ranking pari passu with other financial secured lenders with INR 14,045 crore, except for AKA Export Finance Bank, are further secured by way of first charge on all the movable and immovable fixed assets of the company except fixed assets pertaining to real estate division and fixed assets specifically charged to State Government /State Financial Institutions for availing interest free loans. They are also secured by first charge on land measuring 588 acres of certain land, 167 acres of other land belonging to Infratech, subsidiary of the company, and 167 acres of yet another land also belonging to Infratech ranking pari passu with majority of lenders specified in the annual report.

Secured Loans:

Furthermore, additional specific securities looked as follows:
 

• IFCI Ltd. term loan of INR 400 crore is further secured by exclusive charge over 5.5 acres of commercial land situated at Jaypee Sports City near F1 Stadium.

• ICICI Bank Ltd. INR 1,500 crore term loan is further secured by pari passu charge on all immovable properties admeasuring 100 acres of land of Jaypee Infratech and future pledge of 189,316,882 shares of the company held in various trusts on pari passu basis with Rupee term loan of INR 1,300 crore sanction by ICICI Bank Ltd.

• State Bank of India term loan of INR 750 crore is further secured by exclusive charge over 22.2 acres of commercial land near F1 Stadium, SDZ, Sector 25, Gautam Budh Nagar, Uttar Pradesh, pledge of 100 million of equity shares of Jaypee Infratech held by Jaiprakash associates and second pari passu charge on current assets of the company.

• Canara Bank INR 500 crore term loan is further secured by pari passu charge over 25 acre of commercial land near F1 Stadium, SDZ, Sector 25, Gautam Budh Nagar, Uttar Pradesh.

• INR 1,200 crore ICICI Bank Ltd. term loan is further secured by first charge over land of 9.8 acres at Village Aurangpur, 148.4 acres situated at Village Jaganpur, 151 acres situated a Village Jirkanpur, all belonging to Jaypee Infratech Limited

The export debt, in particular INR 213 crore sanctioned by Export Import Bank of India, is secured by first charge ranking pari passu with all the lenders save and except AKA Export Finance Bank. The security is on all the movable fixed assets of the company except movable fixed assets pertaining to real estate division, fixed assets specifically charged to State Government or State Financial Institutions for availing interest free loans etc., under various schemes framed by State Governments, and any other assets specifically charged.

Term loans amounting to INR 1,300 crore sanctioned by ICICI, INR 300 crore by Bank of Maharastra, INR 200 crore by Yes Bank, INR 500 crore by Canara Bank are secured by way
of subservient charge on all the fixed assets of the company except the fixed assets pertaining to real estate division and fixed assets specifically charged to State Government or State Financial Institutions for availing interest free loans. Of the INR 2,300 crore sanctioned, there were INR 1,520 crore outstanding as of 2016-2017 end.
 

• The INR 1,300 crore ICICI term loan is further secured by 189,316,882 shares of the company, pari passu with INR 1,500 crore ICICI term loan mentioned above, pledge of 750,000 11% cumulative preference shares of Himalayan Expressway Limited, and pledge of 10,212,000 12% preference shares of Jaypee Agri Vikas.

• The INR 500 crore Canara Bank term loan is further secured by pari passu charge over 25 acres of commercial land situated at Jaypee Sports City near F1 Stadium, SDZ, Sector 25, Gautam Budh Nagar, Uttar Pradesh.

• The INR 200 crore term loan sanction by Yes Bank is further secured by way of charge over 11.3 acres of commercial land situated at Jaypee Sports City near F1 Stadium, SDZ, Sector 25, Gautam Budh Nagar, Uttar Pradesh.

Term loans amounting to INR 10 crore sanctioned by SREI with INR 2 crore outstanding and INR 3 crore loan issued by TATA Motors Finance Ltd. with INR 2 crore outstanding together with all interest, liquidated damages, premia on prepayment or on redemption, costs, expenses and other monies is secured by way of exclusive charge over certain equipments of the company. The amount outstanding is as per 2016-2017 financial year end.

State Bank of India sanctioned term loan amounting to INR 150 crore with amount outstanding as of 2016-2017 financial year end of 94 crore. This loan is secured by way of first charge on 2.56 acres of hotel and commercial land purchased from Jaypee Infratech Ltd. in village Wazidpur, Noida and first charge over 3.78 acres of commercial land of Jaypee Infratech Ltd. situated at Sector - 128, Noida.

Standard Chartered Bank sanctioned loans amounting to INR 400 crore, INR 450 crore and INR 620 crore. The amount outstanding was INR 713 crore as of 2016-2017 end. The loans are secured against first charge ranking pari passu by way of equitable mortgage by deposit of title deed over the land admeasuring 355.8 acres at Jaypee Greens Golf Course, Greater Noida, Uttar Pradesh and collaterally secured by first charge ranking pari passu by way of equitable mortgage over land of Jaypee Infratech Ltd. land measuring 39.5 acres situated at village Sultanpur, Noida, Uttar Pradesh and Village Wazidpur, Noida, Uttar Pradesh. The INR 620 crore term loan is further secured by way of pledge of 94,125,000 equity share of Jaypee Cement Corporation Ltd. A tranche of INR 82 crore of the INR 620 crore loan is further
secured by way of pari passu charge by land measuring 26.3 hectares.

Term loan sanctioned by HDFC Limited at INR 450 crore with amount outstanding INR 293 crore is secured against first & exclusive charge by way of registered mortgage over leasehold property project land of 14.2 acres at Jaypee Greens which is part and parcel of 452.26 acres of the integrated Township Jaypee Greens Greater Noida, U.P. alongwith construction thereon both present and future, leasehold property of 38.20 acres at Noida, U.P. and first charge on project land/FSI of 1,101,954 sq. feet of B 10, Suncourt A & Town Centre Residential.

Term loan sanctioned by Standard Chartered Bank at INR 350 crore, United Bank of India loan at INR 150 crore, Allahabad Bank with loan sanctioned of INR 100 crore, INR 50 crore in loan from Karur Vysya Bank and INR 100 crore extended by the South Indian Bank, which collectively have INR 562 crore outstanding, are secured by way of exclusive first charge on pari passu basis over 65 acres of commercial land situated at Jaypee Sports City near F1 Stadium, SDZ Sector-25, Gautam Budh Nagar, U.P.

INR 525 crore term loan sanctioned by Yes Bank Ltd. with amount outstanding of INR 341 crore is secured by way of exclusive charge over 18 acres of commercial land situated at Jaypee Sports City near F1 Stadium, SDZ Sector-25, Gautam Budh Nagar, Uttar Pradesh.

Term loans of INR 1,000 crore sanctioned with INR 431 crore outstanding, standby letters of credit with INR 333 crore sanctioned and outstanding, and bank guarantee INR 100 crore sanctioned (and outstanding) by Banks and IFCI Ltd. are secured by first charge ranking pari-passu on all immovable and movable fixed assets pertaining to the core area sports infrastructure projects and second pari-passu charge on all current assets including receivables pertaining to the aforesaid sports infrastructure project subject to first charge of the working capital lenders exclusive of the standby letters of credit above.

ICICI Bank term loan of INR 150 crore with INR 44 crore outstanding is secured by mortgage of non-core area land measuring 25 acres along Yamuna Expressway, Gautam Buddh Nagar, and second charge on all immovable & movable assets of core area sports infrastructure
project.

Term loan of INR 50 crore, with INR 39 crore outstanding, sanctioned by The Karur Vysya Bank Ltd. is secured by first charge on identified real estate inventory.

Term loan of INR 150 crore by State Bank of India which had INR 120 crore outstanding is secured by pari passu charge over current assets of the company, pari passu charge over land 37.8 hectares situated in Chindwara, M.P., and pari passu charge over assets related to Mandla (North) Coal Mine.

The state interest free loans granted by U.P.Financial Corp. under Audyogik Nivesh Protshahan Yojna Scheme at Grinding Unit in Tanda are secured by way of first charge on the fixed assets of the unit and partly against bank guarantee.

Interest free loans granted by Pradeshiya Industrial & Investment Corp. Ltd. at Grinding Unit in Sikandrabad is secured against bank guarantee.

Working Capital:

The Working Capital facilities at INR 500 crore fund based facilities and INR 4,265 crore non fund based facilities sanctioned by the consortium of 19 member banks with Canara Bank as lead, are secured by way of first charge ranking pari passu on current assets of the company and second charge ranking pari passu on the fixed assets of the company, except fixed assets pertaining to real estate division and fixed assets specifically charged to state government or state financial institutions for availing interest free loans. They are further secured by other assets specifically charged on specific loans. IDBI Bank Ltd. has converted their non fund based limits into fund based limits to the extent of INR 350 crore.

Working capital facility includes pre shipment credit by Standard Chartered Bank which is secured by way of first charge ranking pari passu by way of equitable mortgage over the land admeasuring 355.84 acres at Jaypee Greens Golf Course, Greater Noida, Uttar Pradesh and collaterally secured by first charge ranking pari passu by way of equitable mortgage over land of Jaypee Infratech Ltd. measuring 39.5 acres.

Working Capital facility also includes buyer’s credit to the extent of INR 25 crore availed from working capital consortium member banks out of limit sanctioned to the company and other banks.

Working Capital Demand Loan of INR 200 crore sanctioned by Axis Bank Ltd. is secured by subservient and subsequent charge on current assets of the company.

Bill discounting with INR 36 crore outstanding from SIDBI is secured by way of residual charge on current assets of the company.

Additional Recovery to Certain Lenders: