 "Reliance Naval")
Lenders are in talks with Hazel Mercantile (Hazel), the highest bidder for bankrupt Reliance Naval and Engineering Limited (RNEL), to extend the deadline for payment of Rs 263 crore cash upfront for the company.
If talks fail, the lenders plan to move the National Company Law Tribunal (NCLT) to seek further directions to re-auction the asset. Hazel has time until July 23 to pay the cash upfront, according to an NCLT order in March this year.
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Hazel had bid Rs 2,100 crore for RNEL after the erstwhile Anil Ambani Group company defaulted on loans of Rs 13,000 crore. Of this, it was to pay Rs 263 crore upfront by March; the balance in instalments over five years.
The consortium has so far deposited Rs 30 crore, according to the directions of NCLT Ahmedabad. An email sent to Hazel on Saturday did not elicit any response.
“If the company fails to pay in time, we will ask NCLT for another auction,” informed a banking source.
In its plea before NCLT, the company said it had lined up investors to raise funds, but the kerfuffle in the capital markets in January this year after the release of a report on an Indian conglomerate by a US-based short seller made it challenging for it to raise funds.
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According to the resolution plan timeline, the Swan Energy group company, which acquired the erstwhile Anil Ambani Group company RNEL last month, has to pay Rs 312 crore by December this year to lenders and another instalment of Rs 196 crore by December next year.
It has agreed to pay another Rs 188 crore by December 2025, Rs 280 crore by December 2026, and the remainder Rs 864 crore by the end of December 2027.
The company was sent for debt resolution under the Insolvency and Bankruptcy Code (IBC) 2016 in January 2020.
Hazel’s resolution plan was approved by NCLT Ahmedabad in December last year. Meanwhile, lenders have also initiated talks with asset reconstruction companies to weigh the demand to sell their loans.
“Some of the cases in the IBC have been going on for more than five years. Hence, lenders are looking at the option to exit their exposure by selling the loans,” said a source close to the development.
In November 2021, banks initiated negotiations to sell their loans to the newly created National Asset Reconstruction Company, but the sale failed to take off.
The company owns a shipyard in Pipavav, Gujarat, and relies on government orders for ships and smaller Coast Guard patrol boats. The industry is dominated by government-owned shipyards, which get the lion’s share of orders from the Indian defence sector.
March 2023: Hazel seeks an additional four months to pay cash of Rs 263 crore upfront
