ABG shipyard creditors reject liberty house bid yet again

MUMBAI: Lenders to troubled ship builder ABG Shipyard have once again rejected resolution plan of sole bidder Liberty House in an unanimous decision late on Monday, two people with direct knowledge of the matter said.

The sole proposal in the second round of bidding was rejected by the committee of creditors (CoC), citing provisions of section 29 (a) of the Insolvency and Bankruptcy Code (IBC), they said.

The section lists a wide range of reasons for rejection of the bid, and it could not be immediately confirmed the precise reason for the rejection of London-based metals group Liberty House’s bid.

“After deep deliberations in the meeting the creditors finally came to a conclusion that they were not comfortable with the bid,” one of the persons said, adding that the decision was unanimous and no voting took place.

“As part of the next step, the creditors and the IRPs (interim resolution professionals) decided that the process of inviting fresh bids could commence within a
fortnight,” the person said.

ABG Shipyard owes lenders Rs. 18,245 crore. The company’s liquidation value is pegged at Rs. 2,200 crore. “If we are forced to take a huge haircut on the loan, it’s better we send the company into liquidation,” the second source said. Liberty House couldn’t be reached immediately for comments.

India-born British businessman Sanjeev Gupta’s Liberty House has now bid twice for ABG Shipyard. In the third week of March, creditors had rejected an earlier resolution proposal by the company and called for another round of bidding. ET had on March 19 reported that the rejection was because the offer from Liberty House was not above the company’s liquidation value.

Earlier, Mahindra & Mahindra and the Mistry-family controlled Shapoorji Pallonji Group had submitted expressions of interest to bid for the company, but neither of them submitted binding bids.

Among lenders, ICICI Bank has made the highest claim of Rs. 4,877 crore from the company, followed by IDBI Bank at Rs. 2,573 crore and State Bank of India at Rs. 2,316 crore.

ABG Shipyard is among 12 large companies slotted by the Reserve Bank of India for bankruptcy resolution. National Company Law Tribunal (NCLT) has set a timeline of April 30 by when the resolution plan for ABG Shipyard has to be completed.

Sundaresh Bhat is the resolution professional entrusted with the job of reviving the firm.