The insolvency appellate tribunal has approved the insolvency proceedings against the debt-ridden Jaypee Cement, upholding an earlier order passed by the National Company Law Tribunal (NCLT). A two-member bench of the NCLAT rejected the appeal filed by Alok Gaur against the NCLT order, saying the debt and default matter is proved, and it did not find any error in the order directing the initiation of insolvency proceedings. The National Company Law Appellate Tribunal (NCLAT) rejected Gaur's submission that its parent firm Jaiprakash Associates Ltd (JAL) has signed an MRA (Master Restructuring Agreement) with lenders, undertaken to discharge its liabilities. Under Bucket 1, the divestment of a substantial part of its cement business along with debt of Rs 11,689 crore to UltraTech Cements was approved. The residual debt of JAL and JCCL was bifurcated into two different buckets. Bucket 2A has a sustainable debt of Rs 5,072 crore, which was to be retained under the residual business of JAL to be serviced from the cash flow from the operations of the residual business of JAL. It also envisaged the shifting of JCCL's Shahabad Cement Plant exposure of Rs 778.10 crore to JAL. While Bucket 2B has an unsustainable debt of Rs 13,590 crore, and it was proposed to be transferred to a separate Real Estate SPV for 20 years, backed by land of 1039 acres (already mortgaged to lenders) of the company, having the value of Rs 14,156 crore. The debt of Bucket 2B has not been resolved and remains outstanding.
 

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