Bharati Defence liquidator looks to sell company as going concern

The liquidator of Bharati Defence and Infrastructure (BDIL) has sought bids for the company, which makes ships for defence services and offshore vessels, as a going concern. The National Company Law Tribunal (NCLT) had closed insolvency process related to the firm in January 2019.

 

A senior executive with a lender that has exposure to the sick entity said it was put in liquidation after a long legal battle. Lenders are trying to discern if there is any investor interest in buying the company as a going concern on a consolidated basis. Going concern is the principle that assumes an entity will remain in business for the foreseeable future.

 

The reserve price has been set at Rs 615 crore, according to Deloitte Touche Tohmatsu India LLP, which is managing the liquidation process.

 

Sources said banks have already made provisions for the exposure to this stressed account. If this option does not yield results, the only option left will be a piecemeal sale. 

 

BDIL has state-of-the-art shipbuilding and fabrication facilities in Dabhol, Ratnagiri, Goa, Mangaluru, Chennai, and Kolkata.

 

BDIL’s product portfolio evolved from small-sized vessels and tugs to sophisticated offshore vessels like Platform Support Vessels (PSVs), Anchor Handling Support Vessels (AHTSVs), Offshore Support Vessels (OSVs), jack-up rigs, mid-sized LNG-propelled vessels, and smaller defence vessels.

 

The company was hit by the global and domestic slowdown in the shipbuilding industry that led to cancellation of contracts, resulting in a buildup of unsustainable debt/financing costs.

 

It approached lenders to restructure debts under CDR scheme in December 2011. A majority of lenders sold their stake to Edelweiss financial services group entity.

 

Edelweiss ARC initiated the Corporate Insolvency Resolution Process (CIRP) under provisions of the Insolvency and Bankruptcy Code, 2016, with effect from June 6, 2017.