 "Reliance Naval")
Lenders have started negotiations with top two bidders of Reliance Naval and Engineering, asking them to sweeten their bids for the bankrupt company.
The two bidders — Hazel Mercantile and Naveen Jindal group — are left in the fray for the company that has defaulted to Rs 12,500 crore of bank debt.
“We have asked both the companies to better their bids and we have received positive feedback,” said a source close to the development. While the top bidder, Mumbai-based Hazel Mercantile, has offered Rs 2,100 crore, Jindal has proposed around Rs 400 crore to the lenders.
The lenders are planning to close the deal within the next two weeks by voting on both revised proposals.
The company, which makes warships and offshore supply vehicles, was sent to the National Company Law Tribunal (NCLT) in January last year after it defaulted on its debt repayments.
The company’s debt went up after it failed to deliver the ships in time to ONGC. The oil major had placed an order for 12 offshore supply vessels in 2009-10. Of this, only seven OSVs were delivered till 2015-16. ONGC then cancelled the order and invoked the bank guarantees in 2018-19, leading to additional financial burden on the company. An arbitration petition filed by the company against ONGC is currently pending.
After the company was sent for debt resolutions, its orders dried up and it reported revenues of Rs 75 crore a loss of Rs 1,621 crore for the financial year ended March 2021.
Once operational, the company will be able to support the Indian defence forces by manufacturing technology intensive ships in India, thus saving foreign exchange. At present, defence ships are constructed in the government-owned yards and in foreign countries.
One of the bidders, who withdrew from the process, said the company was worried over the time taken by the lenders to take a decision in the IBC despite a deadline specified in the code.
“We looked at a couple of IBC companies, including Reliance Naval, but the time taken by the lenders and the subsequent litigation with other parties discouraged us to go further,” the bidder said.
