The consortium that won the bid for Reliance Naval and Engineering has sought a four-month extension from National Company Law Tribunal (NCLT) to make its first instalment of payments. The bid winners are reportedly struggling to raise the payment amount, close to Rs 290 crore, that is to be due on March 23.
On Wednesday, NCLT directed the winning consortium—composed of Swan Energy and Hazel Mercantile—to pay at least ₹10 crore as part of the corporate insolvency and resolution process (CIRP) cost. NCLT’s Ahmedabad bench will hear the plea for extension on April 17.
After Anil Ambani-backed Reliance Naval started insolvency proceedings in January 2020, majority of its lenders approved a Rs 2,040 crore payment plan by the winning consortium in December 2022. After NCLT gave its nod to this resolution plan, the consortium was mandated to pay Rs 275 crore in the next 90 days. However, the CIRP cost component of this amount has now increased to Rs 90 crore from the earlier Rs 65 crore, a filing made by the consortium shows.
Now, the consortium has stated in its filing that although it had lined up investors earlier to access funds, the recent disturbance in capital markets have made it more challenging. Alluding to the Adani-Hindenburg fiasco, the filing mentions that a report published by a foreign hedge fund, targeting an Indian conglomerate, has led to obstructions in raising new funds.
According to Insolvency and Bankruptcy Board of India (IBBI) rules, if any winning bidder fails to meet its mandated payment timeline, it will be tagged as a defaulter, and further barred from bidding in any other insolvency proceedings. An extension in payments would help the consortium avoid such a situation.
Following the first instalment of payments, the consortium is required to pay Rs 312 crore by the end of first year, Rs 196 crore by the end of the second, Rs 188 crore at the end of the third, Rs 280 crore by fourth-year end and the remaining Rs 864 crore at the end of the fifth year.
Note: This story has been updated to better reflect the due amount, as given in the consortium's filing with NCLT.