ABG Shipyard received a new resolution plan on May 18 from a potential investor, a month after its resolution professional (RP) called for fresh bids, the company said on Thursday.
ABG Shipyard received a new resolution plan on May 18 from a potential investor, a month after its resolution professional (RP) called for fresh bids, the company said on Thursday. In the last two months, two bids from Liberty House were rejected by ABG Shipyard’s committee of creditors (CoC) because the bid values were too low.
ABG Shipyard was admitted for corporate insolvency resolution process by the Ahmedabad bench of the National Company Law Tribunal (NCLT) on August 1, 2017, and according to the 270-day deadline, the resolution process was supposed to have been completed by April 28, 2018. The company owes close to `19,000 crore to its financial creditors. The CoC rejected the bid from Liberty House because the bid value was lower than the liquidation value of the company, which is around `2,200 crore, sources had said.
While it is not clear how ABG was allowed to pile up such staggering debts, the fact is that the lenders today are saddled with the majority stake of 49% in the firm. The original promoters, led by chairman Rishi Agarwal, have little skin in the game with a shareholding of just 9%. At the end of March, 2016, a shareholding of 33.26% was held by ABG International Private Limited and other promoters. ABG’s net losses in 2016-17 were a whopping `5,716 crore on minuscule revenues of `16 crore, data from capitaline showed.
“The RP and its advisors are in the process of reviewing the proposed resolution plan, information and documents submitted in accordance with the code and the eligibility criteria mentioned therein,” the