Debt-laden Jaiprakash Power Ventures Ltd. has sought shareholders' approval to issue preference shares worth Rs 4,000 crore in to its lenders in the annual general meeting on Sept. 20.
The firm's board at its meeting held on Aug. 31, 2018, had approved the offer and issue of 0.01 percent Cumulative Compulsory Convertible Preference Shares aggregating up to Rs 4,000 crore in one or more tranche on preferential basis to lenders, it said in a notice for AGM.
According to the notice, the company had submitted its proposal for deep re-structuring of loan facilities under Scheme of Assets Management and Debt Change Structure or Samadhan (initiated by the Reserve Bank of India for stressed assets).
The Samadhan envisages that there would be no change of management and the debt of the power companies will be bifurcated into sustainable and unsustainable debt.
It said that the proposal had been favourably considered by the banks / financial institutions and a framework agreement was signed on April 18.
It also sought shareholders' nod to issue long-term financial instruments of Rs 400 crore against the outstanding debt of JSW Energy at a later stage, which would be fully redeemable from the cash flow of the company.
The company has also proposed to convert Rs 352 crore debt of JSW Energy into equity shares of Rs 10 each under the proposal.
The company had taken a term loan of Rs 1,000 crore from Axis Bank Ltd, which disbursed the loan to the Company on the basis of corporate guarantee given by JSW Energy.
Later on JSW Energy repaid the loan amount to Axis Bank on behalf of the company. Against the loan, an amount of Rs 752 crore was outstanding to JSW Energy as on March 31.
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