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The National Company Law Tribunal (NCLT) has re-opened the bidding process for debt-laden shipbuilder Bharati Defence and Infrastructure Ltd by allowing Canadian firm Geotech Investment and Holdings Inc to participate in the resolution process under the Insolvency and Bankruptcy Code (IBC).
The Mumbai bench of NCLT on Tuesday allowed Geotech Investment and Holdings to present proof and source of funds on their ₹3,167-crore resolution plan within two days and to submit a ₹10 crore earnest money deposit (EMD) by October 3. NCLT also directed Geotech to submit a bank guarantee for ₹316 crore — being 10 per cent of their bid amount — by October 10.
The Committee of Creditors had earlier rejected the resolution plan submitted by Geotech. The Canadian firm re-entered the fray after NCLT, earlier this month, permitted two new entities: ARCS Ship Build Services Pvt Ltd and Hong Kong-based investor Ricky Nathaniel to submit their resolution plans by September 21.
None of them submitted their plans, though, the counsel for ARCS Ship Build Services sought more time.
Besides ARCS, other entities whose resolution plans were earlier rejected by the CoC such as Perfect Industries LLC and a Germany-based outfit have the option of returning to the bidding table by showing their proof and source of funds on their respective resolution plans within two days and by submitting the ₹10 crore EMD by October 3 to demonstrate their “seriousness”.
In its resolution plan, Geotech had proposed a 90-day period to bring in the funds.
“As per my plan, 49 per cent of the company will be held by the offshore entity and that required foreign investment promotion board (FIPB) approval. In the scheme submitted, I had proposed a 90-day period to bring in the funds in order that I may get FIPB approval. How long the regulator will take to give me the approval to bring in the entire money that itself is a question mark,” Kunal Dwarkadas, counsel for Geotech, submitted before the NCLT. The outcome of the fresh round of bidding will decide whether NCLT will accept or reject the resolution plan that was submitted by Edelweiss Asset Reconstruction Company and approved by the CoC that mainly comprised Edelweiss, in March.
Bharati Defence owes some ₹8,500 crore to banks most of which was taken over by Edelweiss ARC, which now owns 83 per cent voting rights in Bharati Defence.
The resolution plan of Edelweiss ARC involved converting debt into equity and repaying loans in 15 years.
Vijay Kumar and PC Kapoor, the former promoters of Bharati Defence, the operational creditors and workers of the shipyard have filed an intervener application with the NCLT seeking its approval to reject the resolution plan submitted by Edelweiss ARC.
“The resolution plan submitted by Edelweiss ARC is useless,” Vijay Kumar told BusinessLine on Tuesday before the NCLT heard the case.
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