Lenders to debt-laden ABG Shipyard reject resolution plan by Liberty House

Debt-ridden ABG Shipyards may challenge the decision

The lenders to debt-ridden ABG Shipyard have rejected the resolution plan by Liberty House, the London-based metals group founded by India-born billionaire Sanjeev Gupta, perhaps paving the way for liquidation of the ship building company.

 

The firm, in a filing with the BSE, said the committee of creditors (CoC) took stock of and voted on the resolution plan submitted by Liberty House Group, pursuant to the second bid (April 23, 2018). The same was rejected by the members with the requisite majority.

 

The firm is under bankruptcy proceedings at the National Company Law Tribunal (NCLT). Lenders to the shipbuilding company had earlier rejected the first bid by Liberty House in March 2018.

 

A senior public sector banker said the suitor (Liberty House) has not honoured commitments in the three cases, which includes Amtek Auto (another case with the NCLT).

 

Therefore, lenders are wary of entertaining any additional commitment by the group. There is a likelihood of the group (Liberty) challenging the decision taken by the CoC, said another banker.

 

The outstanding debt was Rs 190.06 billion, as of August 2018. The top three lenders to the ailing company are ICICI Bank (Rs 53.04 billion), IDBI Bank (Rs 25.73 billion) and SBI (Rs 23.73 billion), according to financial claims admitted by creditors.

 

The shipbuilder is among the 12 companies identified by the Reserve Bank of India for bankruptcy resolution.

 

Incorporated in 1985, ABG Shipyard is the flagship company of ABG group, with interests in shipping and cement sectors.

 

It is one of the three private shipyards in India approved by the Indian Navy to build various types of naval vessels.

It has built several vessels for the Indian defence sector.