Lenders may move NCLT on Reliance Naval & Engineering debt resolution
The lenders are in talks with Hazel Mercantile (Hazel), the highest bidder for the bankrupt Reliance Naval and Engineering Limited (RNEL), to extend the deadline for paying the Rs 263 crore advance cash to the company.
If the talks fail, the lenders plan to move the National Corporations Law Tribunal (NCLT) to seek further guidance for auctioning the asset back. Hazel has until July 23 to pay the cash advance, as per the NCLT’s order in March of this year.
Hazel made a bid of Rs 2,100 crore for RNEL after the former Anil Ambani Group defaulted on loans worth Rs 13,000 crore. Of this, Rs 263 crore was to be paid in advance by March; The rest is paid in installments over five years.
The consortium has so far deposited Rs 30 crore, as directed by NCLT Ahmedabad. An email sent to Hazel on Saturday elicited no response.
“If the company fails to pay in a timely manner, we will ask NCLT to conduct another auction,” a banking source informed.
In its appeal to NCLT, the company said it had lined up with investors to raise funds, but a row in the capital markets in January this year after a report on an Indian conglomerate by a US short seller made it difficult for it. to collect money.
According to the timeline of the settlement plan, Swan Energy Group, which acquired Anil Ambani Group’s former RNEL last month, has to pay Rs 312 crore by December this year to its lenders and another payment of Rs 196 crore by December next year.
It has agreed to pay another Rs 188 crore by December 2025, another Rs 280 crore by December 2026 and the remaining Rs 864 crore by the end of December 2027.
The company was sent for debt settlement under the Insolvency and Bankruptcy Act (IBC) 2016 in January 2020.
Hazel solution plan was approved by NCLT Ahmedabad in December last year. Meanwhile, lenders have also begun talks with asset rebuilding firms to balance demand for the sale of their loans.
“Some of the issues in the IBC have been going on for more than five years. Hence, the lenders are looking at the option of getting out of their exposure by selling the loans,” said a source close to the development.
In November 2021, the banks began negotiations to sell their loans to the newly created National Asset Reconstruction Company, but the sale failed to take off.
The company has a shipyard in Pipavav, Gujarat, and relies on government orders for smaller ships and Coast Guard patrol boats. The industry is dominated by government-owned shipyards, which get the lion’s share of orders from India’s defense sector.
January 2020: Reliance Naval and Engineering sent to settle debts after defaulting on loans worth Rs 13,000 crore
December 2022Hazel Mercantile bid of Rs 2,100 crore is cleared by NCLT
March 2023: Hazel seeks additional four months for cash payment of Rs 263 crore advance