Jaiprakash Associates announced yesterday after market hours that it has received the shareholders approval to convert loans, debentures or other borrowings/debt of the company into equity shares/securities of the company. Over 88%  of the votes cast by its shareholders were in favour of this step and is a part of the SDR scheme.

The company has blamed its current plight on recessionary trend in construction and infra sector plus set back in timely monetization of assets, leading to mismatch in the cash flow. All this in turn led to the company not being able to debt obligations. JP Associates owes over Rs.30,000 crore to a consortium of lenders, led by ICICI Bank while the consolidated debt of the entire JP group is over Rs.58,000 crore.

The company has said that the lenders may consider an option to convert their loan/credit facilities, including unpaid interest, in full or part thereof, into equity shares/securities of the company.

Post this news, th stock, duirng the first half hour after opening bell was amongst the top five gainers on the BSE and now it remains some 3% up at Rs.11.50 levels.