Mumbai: The Mumbai bench of National Company Law Tribunal (NCLT) on Wednesday allowed two late contenders—ARCS Ship Build Services Pvt. Ltd and Hong Kong-based investor Ricky Nathaniel—to join the insolvency resolution process of Bharati Defence and Infrastructure Ltd, over-riding objections from Edelweiss Asset Reconstruction Co. Ltd, the sole bidder so far.

ARCS and Nathaniel had separately approached the dedicated bankruptcy court on Monday to join the resolution process for Bharati Defence.

The NCLT bench presided by B.S.V. Prakash Kumar and Ravikumar Duraisamy directed both entities to submit their resolution plans by 21 September. The bench will hear the matter on 25 September.

The resolution plan already submitted by Edelweiss—which also owns 83% voting rights in Bharati Defence—proposes converting debt into equity and repaying loans in 15 years in case the firm revives its finances. The NCLT bench said it decided to consider the two new plans as Edelweiss’s plan does not include any capital infusion into the company.

The NCLT bench also said the Edelweiss plan proposes to convert the government’s debt into equity and allots 10% stake of Bharati Defence to the government without the latter’s approval, and the RP needs to take that into account as well.

The two resolution applicants are seeking to be part of the process even though Bharati Defence’s committee of creditors (CoC) has approved the Edelweiss plan, and the RP has submitted it to the tribunal for approval. “The least said about both so-called bidders the better," said Gaurav Joshi, senior counsel appearing for the RP. “Both have failed to show their bonafide by way of depositing minimum requirement and now these are just delaying tactics by them by the way of coming in the tribunal at the last moment to intervene in the resolution plan," Joshi added.

Edelweiss has already acquired 80% of the loans from the banks. Around 95% of lenders have voted in favour of its resolution plan. The plan was approved on 3 March 2018.

The company faces claims of about 8,500 crore from financial and operational creditors.

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.

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