New Delhi: Jindal Steel & Power Ltd, India’s third largest alloy producer by market value, and two other groups have expressed interest in bidding for Reliance Naval & Engineering Ltd, Bloomberg reported, citing people familiar with the matter.
Dubai-based shipping company GMS and the Kotak Special Situations Fund were among other people who signed up to bid by the February 28 deadline, the report added, citing those on condition of anonymity.
For Naveen Jindal’s Jindal Steel, Reliance Naval may be a captive customer for the company’s shipbuilding plates, said Vidya Rattan Sharma, general manager of the steelmaker. Bloomberg, confirming Jindal’s interest in bidding for the company. She added that Jindal was not partnering with any company for the offer.
On January 15, 2020, IDBI Bank took Reliance Naval Anil Ambani to the National Company Law Tribunal under the Insolvency and Bankruptcy Code. The company owed bank dues worth Rs 1,159.43 crore, bright mint had reported.
Reliance Naval had revealed to the stock exchanges that it had defaulted on loans worth Rs 9,492 crore, becoming the second company owned by Anil Ambani after Reliance Communications Ltd to file for bankruptcy.
Anil Ambani bought the company, formerly known as Pipavav Defense and Engineering Ltd, from the founding president of the shipyard Nikhil Gandhi in 2015, to enter the defense business. At the time, the company was teetering with a debt of Rs 7,000 crore.
The company was later renamed Reliance Defense and Engineering Ltd in January 2016 and then renamed Reliance Naval and Engineering again.
It is the first private sector company to obtain a contract and license for the construction of warships.
The same year, Reliance Infrastructure – which announced the acquisition of Pipapav Defense – issued a notice of arbitration of Rs 5,440 crore to the former founders-promoters of Pipavav Defense, citing a violation of the guarantees concerning the state of the premises and the standards of governance of the company.
According to Express Financial, several financial creditors have claimed over Rs 43,587 crore from Reliance Naval. The company faces claims from banks including State Bank of India (Rs 1,965 crore), Union Bank of India (Rs 1,555 crore) and IDBI Bank (Rs 1,375).
Other companies including Mumbai-based Mazagaon Dock, Russian state-owned United Shipbuilding Corporation, Danish conglomerate AP Moller Maersk Group, among others, have also expressed interest in buying the bankrupt shipyard.