Jindal Steel and Power (JSPL) has moved the National Company Law Tribunal’s (NCLT) Ahmedabad bench, seeking a stay on the resolution process of debt-laden Reliance Naval & Engineering (RNEL). It has urged the tribunal to direct RNEL’s committee of creditors to “peremptorily” reject the winning bid.
On March 17, Hazel Mercantile, in partnership with Swan Energy, emerged the winner with 95% of the committee of creditors approving its resolution plan. The lenders later issued a letter of intent terming it the winning bidder.
In its petition, JSPL has accused Swan Energy of a “flagrant breach” of Section 29A of IBC, which states a person is not eligible to submit a resolution plan if he is a wilful defaulter or is an undischarged insolvent. JSPL was one of the applicants in the final round of the resolution process.
According to JSPL, Swan Energy’s managing director Nikhil Merchant was a director on the board of Navi Mumbai Smart City Infrastructure at the time of submitting the resolution plan for RNEL. Navi Mumbai Smart City is a company promoted by Nikhil Gandhi, who was also the promoter of Reliance Naval (formerly Pipavav Shipyard).
According to the petition, Navi Mumbai Smart City Infrastructure has defaulted on loan repayments, and was classified as a non-performing asset when it was under Merchant’s directorship.
Merchant had resigned from its board on December 6, 2021, months after Swan Energy and Hazel Mercantile filed a resolution plan. The consortium had filed the resolution plan in September 2021.
In its resolution plan, Swan Energy had offered Rs 2,000 crore, of which Rs 200 crore would be paid upfront, and the rest over a five-year period. JSPL had submitted a resolution plan of Rs 2,200 crore, of which Rs 1,020 crore was subject to a favourable outcome of arbitration claims by RNEL.
SKIL Infrastructure, promoted by industrialist Nikhil Gandhi, was the original promoter of Pipavav Defence and Offshore Engineering, which was sold to the Reliance ADA Group in 2015.
A number of firms of Anil Ambani group, including Reliance Infratel (the tower arm of Reliance Communications), Reliance Telecom, Reliance Naval and Reliance Capital are currently in insolvency processes.