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Lenders of Jaiprakash Power Ventures have agreed to acquire significant equity stake in the company by converting part of their debt into equity. Senior bank officials said that lenders decided to invoke strategic debt restructuring (SDR) on Monday, a move that would enable them to recast the loan by bring in new promoter in the company that is struggling to repay its dues.
The shares of the company was up 6 per cent over previous day's close at Rs 6.5 a piece following this development. "We may acquire about 26 per cent in the company and later we may hike the stake if needed," said a senior banker present at the meeting. A week ago, Jaiprakash Power Ventures sold its 500MW Bina power plant to JSW Energy. Jaiprakash Power has a debt of about Rs 22,400 crore as on March 31, 2016. A fortnight ago, lenders had decided to invoke SDR in Jaiprakash Associates, a sister concern of Jaiprakash Power Ventures.
In a notice to the exchange, the company has said, "Joint lenders forum meeting held to review the progress made so far on the corrective action plan has recommended for invocation of strategic debt restructuring (SDR) taking July 25, 2016 as reference date, subject to approval of lenders."
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