News

The Russian Firm Get Time To Bid For R-Naval

Russia’s state-owned United Shipbuilding Corporation (USC) and 11 other firms have been given time till 30 November to submit their resolution and revival plans to acquire the Anil Ambani Group’s Reliance Naval and Engineering Ltd (R-Naval), which owns the Pipavav Shipyard in Gujarat, ThePrint has learnt.

R-Naval is undergoing process under the Insolvency and Bankruptcy Code (IBC) and is facing claims of over Rs 43,587 crore from several financial creditors, including the State Bank of India (Rs 1,965 crore), the Union Bank of India (Rs 1,556 crore), and the IDBI Bank (Rs 1,375 crore).

Of the 12 companies that had submitted expression of interest (EoI) for R-Naval, three of them — APM Terminals, USC and Chowgule Group — have raised some red flags, putting the “whole effort in a bit of a quandary”, sources in the know have told ThePrint.

The firms were initially asked to submit their resolution plans by 30 October. According to sources, the date could also get extended beyond 30 November.

Russia eyeing Navy’s new submarine order

While there were reports earlier that USC had opted out of the fray to buy the shipyard, the Russian Embassy, in a recent statement, has said it is looking forward to acquiring R-Naval.

The reason why USC is interested in R-Naval is that the Russian firm has been eyeing the Indian Navy’s long-pending Project 75I, under which six conventional submarines with Air-Independent Propulsion (AIP) System are to be built. If USC acquires R-Naval, it can build new submarines in India itself, under the Make in India initiative.

Meanwhile, sources have also said APM Terminals, a container terminal operating unit of Danish shipping conglomerate AP Moller Maersk Group, is understood to have conveyed to R-Naval’s Resolution Professional that the company was not interested in submitting any bids as the Gujarat Maritime Board’s approval wasn’t for the terminal business and the company is not into shipbuilding.

Another company with experience in this sector, Chowgule Group, has not agreed on the terms of giving a Rs 5-crore bid bond and a Rs 75-crore personal guarantee, the sources added.

If the three companies mentioned above, including USC, do not bid, the Asset Reconstruction Companies (ARCs) such as Hazel Mercantile Ltd, ARCIL, IARC, JM ARC, CFM ARC, Invent ARC, Phoenix ARC, private equity firm Next Orbit Ventures and US-based fund Interups Inc, will be left in the fray.

It is also feared that R-Naval may go the ABG Shipyard and Bharati Shipyard way. Both ABG Shipyard (with a debt of over Rs 19,000 crore) and Bharati Shipyard (with a debt of over Rs 13,000 crore) are already under liquidation, with lenders likely to get less than Rs 800 crore and Rs 600 crore, respectively.

IDBI Bank first to file a claim in 2018

The IDBI Bank had first filed its claim against R-Naval in September 2018, when its dues were worth about Rs 1,250 crore. The company was admitted for insolvency proceedings by the Ahmedabad bench of the National Company Law Tribunal (NCLT) on 15 January.

In August, the company received EoIs from 12 parties.

Earlier this month, the National Company Law Appellate Tribunal (NCLAT) had also directed to exclude the lockdown phase — 25 March to 31 August — while computing the insolvency resolution period for R-Naval.

Under the IBC, the corporate insolvency resolution process of any debt-ridden firm has to be completed within 180 days or within the extended period of 90 days and mandatorily be completed within 330 days, including any extension and the time taken in legal proceedings.

Failing to do so leads to the company having to go for liquidation.

The initial 180-day period was to expire for R-Naval on 21 August. The Resolution Professional for R-Naval had approached the NCLT, demanding that the lockdown period should be excluded from calculating the time period. The professional had submitted that since the corporate office of the company is situated in Mumbai, he could not finish his work within 180 days.

The NCLT did not accept this and only gave a 90-day additional extension. But this order was reversed by the NCLAT. Therefore, the initial 180-day period for R-Naval will now end sometime in January-February next year, after which it will be entitled to another 90-day extension if required.

Advertisement
Source
ThePrint

Shankul Bhandare

Hello, I am shankul and I love defence research and development and want to spread it through blogging.

Leave a Reply

Your email address will not be published. Required fields are marked *

Related Articles

Back to top button
Translate »