Nagpur: Bank of America (BoA) has taken over loans worth around Rs3,290 crore owed by city-based company, Jayaswal Neco Industries Limited (JNIL) to a consortium of financial institutions led by SBI. The loans had turned NPA and were among the major stressed assets with the Indian banks.JNIL which was named in the coal block allocation scam under the UPA regime had been going through a tough phase following a slump in the steel casting business in which it deals.Sources privy to the deal said loans worth Rs4,700 crore which form nearly 88% of JNIL’s total debt were auctioned through the National Company Law Tribunal (NCLT). BoA was the single bidder which took over the loans at 70% of the value. Or in other words banks have taken a haircut of 30% in the loans granted to JNIL.The bank has been particularly looking for certain potentially good projects where the loans have been defaulted for whatever reasons, said independent sources. In this case 88% of the loans were auctioned. Now in turn BoA will be looking for potential investors who would be taking over the debt and later convert it into equity. This will also pave way in bringing a professional management in the company through the new stakeholders.Since BoA has major part of the debt, it is expected to have a say in the future proceedings related to JNIL’s remaining loans too. When contacted, BoA officials refused to comment. BoA has brought the JNIL deal through an asset reconstruction company Assets Care and Reconstruction Enterprise (ARCE).JNIL’s name had featured in second list of stressed accounts released by the RBI. Once a major name in the city’s business circles, JNIL is run by the Jayaswal family with the patriarch Bastanlal Jayaswal at the helm.The company is basically into steel and casting and its products were having a low demand. JNIL has been also named in the FIRs registered in the coal block allocation scam. It was also in news around seven years ago when following a partition of family business, a new company — Abhijeet Group was formed. Abhijeet Group run by Basantlal’s son, Manoj also ended up being a bad debt of over Rs12,000 crore.JNIL’s loan was classified as NPA following an inspection by the RBI into the lenders’ accounts during 2016. It was pointed out by RBI that the loan should be termed as NPA because the company could not meet the commercial operation date (COD) for its plant at Raipur, for which the loan was availed. Even as the bankers had contended that the loans were being still serviced, RBI inspectors had maintained that not meeting the COD itself raised doubts over JNIL having sources to repay the loan.

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