2020 July 3
Lenders to Reliance Naval and Engineering Ltd (RNAVAL), the bankrupt shipyard owned by Anil Ambani’s Reliance Group, have extended the date for submitting expressions of interest (EoI) to revive India’s biggest integrated shipbuilding facility by capacity, to July 27.
The original deadline set by a group of lenders led by State Bank of India for the EoI had ended on June 27 with five entities submitting bids. The lenders felt the bidder interest for the yard located at Pipavav in Gujarat’s Amreli district was low due to the fallout of the pandemic-induced restrictions.
The company, which has a permit from the government to build warships, is being sold under the Insolvency and Bankruptcy Code (IBC) to recover unpaid dues of ₹43,587 crore. Of this, the resolution professional (RP) has admitted ₹10,878 crore of dues of financial creditors while another ₹32,693 crore is under verification.
Operational creditors have claimed another ₹1,922 crore from the company, of which only ₹485 crore has been admitted.
Russia’s state-owned United Shipbuilding Corporation (USC) is the only serious contender from the list of five that submitted the initial bids for the yard, the only one in the country that was selected by the US Navy for repair, service and maintenance of its Seventh Fleet operating in the Indian Ocean region.
USC is the largest shipyard in Russia with 40 yards. Its design offices are responsible for almost all warships that are built and developed for the Russian Navy and foreign customers.
During a visit to Russia on September 5 last year, Prime Minister Narendra Modi, accompanied by Russian President Vladimir Putin, had taken a tour of the Zvezda shipyard, a shipbuilding and engineering complex run by USC in the town of Bolshoy Kamen, Vladivostok, in the Russian Far East.
“During our visit, President Putin showed me cutting edge (sic) technologies at the shipyard. My visit opens up new pathways of cooperation in this important field,” Modi had tweeted then.
Another interesting contender is APM Terminals Management, the container terminal operating unit of Danish shipping conglomerate AP Moller Maersk Group.
APM Terminals runs a port at Pipavav, adjacent to the yard. Port industry sources said that its interest in the yard could be with the aim of expanding the port by converting the yard.
Mumbai-listed Gujarat Pipavav Port Ltd (GPPL), in which APM Terminals holds a majority 43.01 per cent stake, said it has not applied on the EoI issued by the RNAVAL lenders, but couldn’t confirm whether its parent had submitted an initial bid.
GPPL only has eight years remaining on the 30-year concession agreement it had signed with a Gujarat government agency to run the facility.