Jaiprakash Associates shares gain over 5%

New Delhi: Shares of Jaiprakash Associatesrose over 5 per cent today after the debt-laden JP Group said its shareholders have approved the company's proposal to convert its debt into equity.

The stock surged 5.11 per cent to Rs 11.71 on BSE.

At NSE, shares of the company gained 5.38 per cent to Rs 11.75.

Shareholders of Jaiprakash Associates (JAL) yesterday approved the "option to convert loans, debentures or other borrowings/debt of the company into equity shares/securities of the company," it said in a regulatory filing.

Explaining the rationale behind the move, JAL in a filing had earlier said that recessionary trend in construction/infrastructure sectors during last few years coupled with setbacks in timely monetisation of some of the assets of the company resulted in cash flow mismatch leading to some delays in honouring debt obligations.

"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...," it had said.

In last few months, JAL has informed exchanges that it has failed to meet its debt and interest payment commitments.