Lenders may agree to give more time to Hazel Mercantile to pay upfront cash for the acquisition of Reliance Naval and Engineering, a bankrupt shipyard company, after Hazel moved the court seeking two more months after it failed to meet the July 23 deadline.
Hazel Mercantile sought additional time to pay the upfront cash as it cited market upheaval for its inability to raise funds by the deadline.
Hazel had bid Rs 2,100 crore for RNEL, a company earlier owned by Anil Ambani after the company defaulted on loans worth Rs 13,000 crore. The company was sent to NCLT for debt resolution under the Insolvency and Bankruptcy Code, 2016.
Of its offer, Hazel was to pay Rs 263 crore by July 23. This was the second deadline set by the company to pay the upfront cash to the banks after it was unable to meet the payment milestone of March this year.
The NCLT will hear the petition next week.
A banker said like Jet Airways, the debt resolution of Reliance Naval is stuck as the bidder is facing liquidity issues.
“We have agreed to offer more time to the bidder and if the bidder backs out, the company will be sent for liquidation,” said a banker, close to the development.
Hazel will be asked to pay part of its offer so as to keep the company as a going concern and meet its daily expenditure, he said.
As per the resolution plan timeline, BSE-listed Swan Energy owned Hazel Mercantile has to pay Rs 312 crores by December 2023 to the lenders and another instalment of Rs 196 crores by December next year.
It has agreed to pay another Rs 188 crore by December 2025, Rs 280 crore by December 2026, and the rest by Rs 864 crore by the end of December 2027. With the upfront cash coming in late, bankers are expecting the payment milestones to change further.
The company was sent for debt resolution under the Insolvency and Bankruptcy Code 2016 in January 2020. The Hazel Mercantile’s resolution plan was approved by the NCLT Ahmedabad in December last year.
Reliance Naval fell into bad times as it was unable to procure orders from the Indian Navy and Coast Guard to make patrol vessels. The orders from ONGC for the construction of offshore supply vessels also dried up leading to its bankruptcy.
December 2022: NCLT clears Hazel Mercantile’s offer of Rs 2,100 cr
March 2023: Hazel seeks additional four months time to pay upfront cash of Rs 263 cr
July 2023: Fails to pay entire upfront cash, seeks more time
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