Companies

Lenders panel to hire an independent consultant to negotiate a deal with RNaval bidders

Our Bureau Mumbai | Updated on September 01, 2021

Bids were legally compliant but below the fair value and liquidation value set for the deal

A lenders panel led by IDBI Bank will hire an independent consultant to start commercial negotiations with Hazel Mercantile Limited, Navin Jindal Group, and a consortium of Dubai’s GMS and Turkey’s Besiktas Group after their bids for the bankrupt Reliance Naval and Engineering Ltd (RNaval) were legally compliant but below the fair value and liquidation value set for the deal.

Unpaid dues

RNaval, the bankrupt shipyard earlier owned by Anil Ambani’s Reliance Group, is being sold under the Insolvency and Bankruptcy Code to recover unpaid dues worth ₹10,878 crore for financial creditors.

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Operational creditors have claimed another ₹1,922 crore from the company, of which only ₹485 crore has so far been admitted.

The admitted debt by the resolution professional and approved by the committee of creditors is ₹12,000 crore.

Low bid values

The liquidation value for the shipyard has been set at ₹1,800 crore while fair value has been pegged at ₹2,500 crore.

The resolution plan of Hazel Mercantile of ₹730 crore was about 6 per cent of the admitted debt while Naveen Jindal Group’s offer of ₹320 crore translates into a haircut of 97 per cent of the admitted debt. The GMS-Besiktas consortium offered upfront cash of ₹50 crore.

Hazel Mercantile is a unit of Mumbai-based Veritas Group. GMS Inc is the world’s biggest cash buyer of ships for recycling.

“As all the three bids were found to be legally compliant, the committee of creditors will appoint an independent consultant to start commercial negotiations with all three parties,” one of the sources said.

Published on September 01, 2021

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