NCLAT stays insolvency process for Dighi Port till Aug 21

P Manoj Mumbai | Updated on July 25, 2019

Directs port promoter and lenders to settle dues mutually

The National Company Law Appellate Tribunal (NCLAT) has stayed the corporate insolvency resolution process of Dighi Port Ltd till August 21 and directed Balaji Infra Projects Ltd, the port promoter, to discuss and mutually settle the lenders dues.

Hearing a batch of appeals separately filed by Balaji Infra Projects and Adani Ports and Special Economic Zone Ltd (APSEZ) on July 24, NCLAT also observed that APSEZ and Jawaharlal Nehru Port Trust (JNPT), can talk directly to the port promoter if they were keen on investing in Dighi Port.

Dighi Port Ltd, the entity that runs a private port in Maharashtra’s Raigad district, was dragged into bankruptcy proceedings under the Insolvency and Bankruptcy Code (IBC) last year after the National Company Law Tribunal (NCLT) ordered start of corporate insolvency resolution process on a petition brought by an operational creditor – DBM Geotechnics and Constructions Pvt Ltd.

Dighi Port, majority owned by Balaji Infra Projects Ltd, owed ₹30 crore to DBM Geotechnics for constructing multi-purpose berths 1 and 2 at Dighi and berth No 3 at Agardanda, also in Maharashtra.

APSEZ – India’s biggest private port operator — had quoted ₹1 crore more than JNPT in its resolution plan but that was rejected by the Committee of Creditors (CoC) led by Bank of India, which, instead approved the bid submitted by JNPT on February 1, forcing APSEZ to file an appeal with NCLAT.

On May 8, NCLT approved the resolution plan submitted by JNPT with certain conditions and had asked JNPT to file an affidavit conveying its acceptance or rejection of the modifications.

During a hearing on July 2, JNPT told NCLT that the modifications suggested by the Tribunal were “not acceptable” to it, forcing NCLT to suggest that “one more opportunity be given to all the bidders so that maximization of value of corporate debtor can be achieved”.

The NCLAT observations came after the legal counsel to the Resolution Professional (RP) for Dighi Port Shailen Shah submitted that the claim of DBM Geotechnics, at whose instance the port company was taken to NCLT, has “not been admitted” because it had not completed the work entrusted to it by Dighi Port Ltd.

A surprised NCLAT directed the RP to file a written submission in this regard ahead of passing a final order.

Lawyers representing the port promoter and the committee of creditors (CoC) separately also told NCLAT that they were ready to settle the dues mutually.

Given that fact that the claim of the operational creditor at whose behest the port company was taken to NCLT, has not been admitted and with the port promoter and the lenders ready to settle the dues, the insolvency process for Dighi Port could be dropped, say industry sources.

“As soon as I get a certified copy of the NCLAT order, I will go to the bankers and say I want to settle their dues. Because, before the resolution process started at NCLT and before the RBI circular of February 12, 2018, the banks had agreed for a one-time settlement of Rs 780 crore for which two term sheets were prepared,” said Vijay Kalantri, Chairman and Managing Director of Balaji Infra Projects.

“But, after the February 12, 2018 RBI circular, the settlement offer was called off by the lenders. After the supreme court struck down the RBI circular as “null and void” earlier this year, we again wrote to the banks to revive the offer to settle their dues based on which Balaji Infra would become minority shareholders of the port company and either Germany’s Hamurg Port or UAE’s Saraf Group would become majority owners of the port,” Kalantri added.

Along with interest and penal interest, the lenders dues is now estimated at ₹3,074.51 crore.

Published on July 25, 2019

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