India's Jaiprakash Power Plunges to Record Low on Debt Delay

  • Company says reaches standstill agreement with bondholders
  • Jaiprakash to try making full repayment of bonds by March 31

Jaiprakash Power Ventures Ltd., a unit of the company that built India’s Formula One race track, fell to a record low after delaying repayment of dollar-denominated convertible notes.

Jaiprakash needs to repay a remaining $101.4 million of its 7 percent notes and said Friday it had reached a standstill agreement with investors holding more than 75 percent of the principal outstanding to delay repayments due on Feb. 13.

The company will attempt to redeem the bonds in full, along with interest due, by March 31, according to an exchange filing. Alternatively, it will pay $20 million by March 15 and target a repayment deal by March 31, the filing said.

The company’s shares fell as much as 11.6 percent to a record low of 4.95 rupees in Mumbai on Friday before closing at 5.15 rupees. Parent Jaiprakash Associates Ltd. also fell to an unprecedented intra-day level before closing 4 percent lower at 7.20 rupees.

Jaiprakash raised $200 million selling the notes in 2010 and delayed repayment by a year after missing an original date of February 2015. The company and the parent have been selling assets to reduce group debt, which more than doubled to 753 billion rupees ($11 billion) in the five years through March 2015. 

A company panel will meet Feb. 29 to finalize the repayment plan. Jaiprakash will approach the Reserve Bank of India to seek approval for extending the maturity date of the notes.

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