JP Associates Posts Loss Of Rs 106.5 crore – Livemint – 13-Nov-2014

November 13, 2014 - Uncategorized

Jaiprakash Associates Ltd, the engineering and infrastructure unit of the debt-laden Jaypee Group, on Wednesday reported a net loss of Rs.106.5 crore for the September quarter, at a time when the promoters are actively seeking to pare debt. The company had posted a profit of Rs.67.67 crore in the corresponding quarter a year ago. Revenue dropped 15% to Rs.2,664.12 crore in the reporting quarter. Finance costs rose 21% to Rs.793.29 crore compared with a year ago. The group is trying to pare its debt of around Rs.60,000 crore by selling assets. On 25 September, the company announced the sale of three hydropower projects run by Jaiprakash Power Ventures to JSW Energy Ltd. The results were announced after market hours. Most of Jaypee’s investments in the infrastructure and power sector could not yield returns enough to service its debt. As a result, finance costs have been trimming the company’s profitability. The group has tried to generate short-term funds in the past by selling small land parcels and promoter’s equity. The only option for the group was to sell assets, says an analyst at a domestic brokerage firm, who requested anonymity. “The reported loss in this quarter only goes to show the financial distress. Hopefully, the hydropower asset sale should aid the group in the future,” he added. The group, however, still has plans to increase its leverage. In the annual general meeting of Jaiprakash Associates, held on 27 September, shareholders approved raising loans of up to Rs.40,000 crore. Earlier, the company had said that apart from temporary loans obtained from the company’s bankers in the ordinary course of business, it will raise Rs.40,000 crore worth of loans including in foreign currency in equivalent rupees. Till now it has sold three of its cement plants and three power plants. Media reports have indicated that it plans to sell almost all of its cement assets. In September, Mint reported that the group has reworked its strategies to focus more on the engineering and infrastructure businesses, which were the initial mainstays of the company. The group’s engineering and construction unit has recently secured big orders in Bhutan and is expecting more. It will look at more such opportunities to revive the business, which can help in generating cash.

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