Voting on the resolution plan for the bankrupt Reliance Naval shipyard today crossed the crucial threshold level of a minimum of 66 per cent votes needed for approval of a winning bid by lenders.
Sources have told Business Today TV that by noon today, nearly 77.5 per cent voting was completed with lead creditor IDBI Bank and other lenders like the State Bank of India participating in the voting on Hazel Mercantile's Rs 2,700 crore bid for Anil Ambani's bankrupt shipyard.
Section 30 (4) of the Insolvency and Bankruptcy Code (IBC) specifies that the Committee of Creditors (CoC) may approve a resolution plan by a vote of not less than 66 per cent of voting share of the financial creditors.
The CoC has now taken a break, and will resume voting day after tomorrow with the Bank of Baroda scheduled to cast its vote.
Voting on the bids has been underway since February 24 and is now likely to conclude on March 17, the source added.
Once the CoC concludes voting, the winning bid goes to the National Company Law Tribunal (NCLT) for final approval.
The development comes at a time when industrialist Anil Ambani has launched a twin-pronged effort to try and wrest back control of what was the largest private defence shipyard in India.
As part of this last-ditch effort, Ambani's Reliance Infrastructure Ltd has moved to torpedo Mumbai-based industrialist Nikhil V. Merchant's bid by questioning his eligibility to participate in the bidding for Reliance Naval.
Separately, Reliance Infrastructure has also submitted an offer to the lenders to pay up a part of the outstanding dues and wrest back control of the bankrupt entity that was formerly known as Pipavav Shipyard. The company proposes to pay the lenders a total of Rs 2525 crore starting with an upfront Rs 25 crore token.
Reliance Infra's plea to declare the Hazel Mercantile consortium as ineligible to bid was heard by the Ahmedabad bench of the NCLT on Monday. The NCLT directed the resolution professional of Reliance Naval and Hazel Mercantile to file a response on the issue of maintainability within a week. The court will hear the matter next on March 30.
The resolution process of Reliance Naval began over 26 months ago to recover over Rs 12,429 crore owed to financial creditors including the State Bank of India and the Union Bank of India among others.
A consortium of two companies - Hazel Mercantile Ltd and Swan Energy Ltd - has bid around Rs 2,700 crore for the bankrupt shipyard. This bid was accepted by the resolution professional of Reliance Naval after a legal process three months ago.
Under the IBC, a bid for a bankrupt asset can only be accepted once the eligibility is verified. The Hazel Mercantile bid had been accepted on December 13 last year.
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