Jaiprakash Power may default on $200M bond maturing next month

Jaiprakash Power Ventures Ltd (JPVL), a public-listed subsidiary of Indian infrastructure conglomerate Jaypee Group, cautioned on Wednesday that it could default on payments for convertible bonds worth $200 million (Rs 1,230 crore) maturing next month, as per a stock market disclosure.

It said that the revenues generated from its power projects and existing cash balances may not be sufficient to fulfil its obligations under the convertible bonds due to on February 13, 2015.

However, the company said, it is confident to pay all the amount due under the bonds on or before March 31, 2016.

Jaiprakash Power Ventures has invited all the bondholders to have a meeting on February 2, 2015 and discuss the company's circumstances and a repayment schedule.

One of the other factors that effected company's performance is Supreme Court's decision to cancel coal blocks even for those companies that had developed the block in joint ventures with state mining corporations.

In January 2010, JPVL raised $200 million by issuing convertible bonds of $1,000 each. The price of conversion was fixed at Rs 85.81 per share on the date of maturing.

Shares of Jaiprakash Power Ventures last changed hands at Rs 11.67 each, down 1.60 per cent on BSE in a flat Mumbai market on Wednesday.

If the default happens, it will be the first major convertible bonds default by an Indian company in recent times. In 2012, wind turbine maker Suzlon Energy Ltd also failed to meet its repayment obligations. Since then, the company is under corporate debt restructuring process.

New Delhi-based Jaiprakash Power Ventures (formerly known as Jaiprakash Hydro-Power Ltd) was founded in 1995. The firm is engaged in the generation and sale of hydro-electric power. It owns and operates  300 MW Baspa-II Hydroelectric Project at District Kinnaur, Himachal Pradesh , 400 MW Vishnuprayag Hydroelectric project, at District Chamoli, Uttarakhand and 1000 MW Karcham-Wangtoo at District Kinnaur, Himachal Pradesh.

Recently, the firm signed a deal with Sajjan Jindal-led JSW Energy to sell two of its three key hydroelectric projects at an enterprise value of about Rs 9,700 crore.

(Edited by Joby Puthuparampil Johnson)

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