ARCS Shipbuild, HK investor move NCLT to buy Bharati Defence
Both have sought to join resolution process though Bharati lenders have given nod to Edelweiss ARC’s resolution plan
Mumbai: Mumbai-based ARCS Shipbuild Services Pvt. Ltd and Hong Kong-based investor Ricky Nathaniel have separately approached the Mumbai bench of the National Company Law Tribunal (NCLT) to join the resolution process for Bharati Defence and Infrastructure Ltd.
They are seeking to join the process even though Bharati Defence’s committee of creditors (CoC) has already approved a resolution plan submitted by Edelweiss ARC, and the resolution professional (RP) has submitted it to the tribunal for its approval.
“We will show our credential and we will also bring the money. We are ready to make an upfront payment of ₹2,500 crore,” said Ankita Singhania, an advocate, appearing for Hong Kong-based investor Nathaniel.
“We were informed that the lenders are willing to consider any reasonable bid that comes to the tribunal.”
Meanwhile, Simil Purohit, representing ARCS Shipbuild, argued ARCS has valued Bharati Defence at ₹2,300 crore and is willing to pay ₹200 crore upfront.
The counsel also sought more time to submit the details of their bids in the tribunal.
Countering this, Zal Andhyarujina, counsel for the Edelweiss ARC argued that the only reliable resolution plan is its own.
“After going through all the other plans submitted by the bidders, the lenders had decided to approve this plan since there is a higher chance of revival of the company under the plan,” argued Andhyarujina.
Edelweiss ARC had acquired 80% of the loan from the banks.
As of now, it holds 83% voting rights and are the resolution applicant (bidder) to acquire the company as well.
Around 95% of the lenders have voted in favour of the resolution plan submitted by the Edelweiss ARC.
The company faces claims of about ₹8,500 crore from financial and operational creditors.
The division bench of NCLT presided by B.S.V. Prakash Kumar and Ravikumar Duraisamy has posted the hearing of the case on 12 September and has directed Nathaniel to show his bonafides and prove the bidder has the financial credibility to be part of the process.
The tribunal has also directed Dhinal Shah, the resolution professional of the company, to give a detailed statement of the income and expenses in the company ever since the company was taken over by the resolution professional.
Edelweiss ARC has referred the company to the bankruptcy court. Bharati Defence, earlier known as Bharati Shipyard, was renamed after Edelweiss ARC acquired the majority of loans from banks.
On 8 March 2018, the resolution professional had informed the exchange that the resolution plan has been approved by the majority of CoC members.
Earlier, on 10 May, operational creditors and former promoters of Bharati Defence had sought court intervention to reject the resolution plan submitted by the resolution professional.
The operational creditors and former promoters say the plan should be rejected as they were neither kept in the loop at the time of the CoC meeting nor have they received a copy of the resolution plan.
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