Jaiprakash Power Ventures Ltd and FCCB

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J P Power Ventures Ltd (Rs.11.10) has to pay $200 million worth of foreign currency convertible bonds (FCCBs) which were due on 13 February but are likely to be rescheduled. The bondholders will vote on the firms’s proposed repayment schedule in a 30 March meeting.

As part of the proposed rescheduled payment agreement, the firm looks to extend the maturity date of the FCCB to 13 February 2016. The proposed repayment schedule will include an upfront payment of $25 million on the effective date of rescheduling. Further, the company proposes to pay another $75 million on the receipt of the sale proceeds for its two hydropower plants to JSW Energy Ltd. The remaining amount is to be paid on or before 13 February 2016. Hence this issue is more or less closed. 

Debt for the Jaypee group is seen at around Rs.60,000 crore, of which Jaiprakash Power Ventures alone had debt of Rs.17,887.72 crore at the end of the September quarter. The firm has started talks with its bankers to refinance debt worth Rs.10,000 crore. 

In the last two years, the group has been selling assets to reduce debt. In a recent deal, Aditya Birla Group’s Ultratech Cement Ltd agreed to buy Jaiprakash Associates’s two cement plants in Madhya Pradesh for Rs.5,400 crore.

The stock should now slowly move towards Rs.14-15, especially after Jaiprakash Power Ventures bagged the Amelia (North) mine in Madhya Pradesh quoting Rs.712 per tonne and the Second Unit of 660 MW of the Jaypee Nigrie Super Themal Power Project or JNSTPP starting commercial operation with effect from 00.00 hours of February 21, 2015. 

It therefore a screaming buy at Rs.11.10..............