Adani Ports and Special Economic Zone Ltd, Haldia Petrochemicals Ltd and, Accord Distilleries and Breweries Pvt Ltd have shown interest in reviving Nagarjuna Oil Corporation Ltd (NOCL) which is setting up a 6 million metric tonnes per annum (MMTPA) petroleum and oil refinery project in Cuddalore, Tamil Nadu. The company has been under liquidation.
NOCL has revealed that the three prospective bidders have submitted their Expressions of Interest (EoIs) for their scheme for revival under Section 230 of the Companies Act, 2013.
The EoIs are under scrutiny and verification, and the liquidator would share the Asset Memorandum or the Valuation Report with the bidders, based on which they can file a scheme through the liquidator. The schemes will then be examined by the creditors and the National Company Law Tribunal (NCLT) and the best scheme will be approved, said sources close to the development. If the three bids are not approved, the liquidator may have to go for an auction.
The Insolvency and Bankruptcy Board of India (IBBI) had recently brought in a rule that the liquidation process should be completed within one year of its commencement. While the rule might not be fully applied to the company, it has, however, completed almost seven months now after initiating the liquidation process, which has to move fast to complete the procedure within a short period, said sources.
Last month, Haldia Petrochemicals withdrew an appeal filed with the National Company Law Appellate Tribunal (NCLAT) seeking to participate in the resolution and revival process.
NOCL had earlier failed to get a successful resolution plan in the Corporate Insolvency Resolution Process (CIRP) and in December 2018, the National Company Law Tribunal (NCLT), Chennai, ordered liquidation of the company, which is an associate of Nagarjuna Oil Refinery Ltd (NORL).
In view of the fact that the project can still go on if properly funded and managed, there is one more opportunity for the revival of the company through a scheme that has to be selected by the liquidator.
The liquidator called for EoIs to finalise a scheme submitted by any interested company after considering various aspects. IBC's Liquidation Sections provide for a revival through a competitive bidding process on "as is where is" basis, said sources.
Haldia Petrochemicals and GP Global were the two investors in the final round of resolution plan discussions earlier, but the proposals fell short of the liquidation value of Rs 1,450 crore as reported earlier. There are around 15 lenders for NOCL.
NOCL, a joint venture of Hyderabad’s Nagarjuna Fertilizers & Chemicals Ltd (NFCL) and TIDCO of Tamil Nadu Government, is carrying out a 6 MMTPA petroleum and oil refinery project in Cuddalore, almost 200 kilometers south of Chennai, which is stalled due to a shortage of funds.
The project, for which the construction work started in 2009, had been partially completed in December 2011, when a cyclone and shortage of funds stopped work. The plant has the capabilities of meeting Euro VI requirements with some additions. According to earlier reports, the company has around Rs 9,000 crore of debt, of which around Rs 8,000 crore has been loaned by 15 banks. Once the recovery is made and the vendors, employees and others are repaid, the shareholders would be paid based on the approved mechanism.