In India, Reliance Naval and Engineering Limited (RNAVAL) is the first private sector company to procure a license and contract to make warships. It is the largest engineering infrastructure in India and is also the largest in the World.
The Ahmedabad National Company Law Tribunal (NCLT) has stopped Reliance Naval and Engineering (RNEL) creditors from voting on the resolution plan. It is blocked until a decree is passed on whether Citi Securities and Financial Services should be a part of the panel of creditors.
Voting on a plan arranged on December 21 was canceled by the Resolution Professional Sudip Bhattacharya, backed by Duff and Phelps.
Citi securities’ Rs 2,538 crore claim has not been entered on the bankrupt shipbuilding company by the Resolution Professional as it has been marked for further investigation. The claim was assigned by Reliance Infrastructure to RNEL.
As per the Insolvency and Bankruptcy Board of India’s rules, financial creditors whose claims had been admitted by the Resolution Professional can only vote on the resolution plan.
On Wednesday, NCLT asked the Resolution Professional to re-verify Citi Securities’ claim and also asked the lenders to provide necessary documents to the Resolution Professional.
On December 20, the tribunal was organized to listen to the matter and, if the Citi Securities claim was incorporated it would have obtained the highest share of proceeds from the profitable bidder with approximately 17% share of the debt. It would have reduced recoveries of other creditors such as State Bank of India and Union Bank of India– the two largest creditors.
The biggest verified debtholder of E Complex is Citi Securities. The construction and engineering work of Reliance Navel is undertaken on the land owned by E Complex.
Citi Securities is an affiliate of VB Desai Financial Services which is a listed company that centers on funding banking and company advisory.
One of the lenders stated that the Hezel Merchantile, a part of Groupe Veritas, is far better than Jindal Steel and Power, a part of Naveen Jindal Group Company, as the creditors of Reliance Naval has acquired funds from both the bidders.
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