The Competition Commission of India (CCI) has approved Dalmia Cement (Bharat) Limited's proposal to acquire Jaiprakash Associates Limited (JAL), which is in the process of an insolvency resolution lawsuit. This is a key development in JAL's Corporate Insolvency Resolution Process (CIRP) as an offer from Dalmia is approved before the final agreement is reached by the committee of creditors (CoC).
This clearance has been given against competition as the Adani Group is also bidding for the same acquisition, which the antitrust regulator is investigating. According to the press release issued by the CCI, the transaction is a complete acquisition of JAL by Dalmia on the lines of the Insolvency and Bankruptcy Code,2016.
JAL, a multi-business company that operates in various businesses, including real estate, cement, hospitality, and engineering, has also had legal complications over its proposed 1,000-hectare Sports City project in Greater Noida. Another serious legal issue has recently arisen, where the land budgets have been cancelled by the Yamuna Expressway Industrial Development Authority (YEIDA), which is even under pending consideration in the Supreme Court at present.
This pending legal problem has already influenced various bids concerning JAL assets, some offered by the Adani Group, Vedanta Group, and Jindal Steel & Power Ltd. The bidders will be required to provide resolution plans to the CoC that address these challenges.
The fact that the CCI has given Dalmia the okay with its proposal means that the deal is set to advance further in the acquisition process. However, the regulatory environment is volatile, and CoC will be granted additional approvals. Meanwhile, in a similar development, the Ministry of Corporate Affairs is likely to make an amendment in the Insolvency and Bankruptcy Bill to indicate whether pre-approval of the CCI is necessary to give resolution bids under the CIRP framework.
This evolution would facilitate more approvals of subsequent acquisitions. The future of JAL's resolution is primarily linked to the outstanding key legal issues and the final approval of the CoC.