Mumbai: Anil Ambani-led Reliance group on Wednesday said it has sent a resolution plan to the lenders of Reliance Naval & Engineering, which has not been servicing its over Rs 9,000 crore debt from over two dozen banks for many months now, and is awaiting their reply.
Reliance Naval is the second firm from the Anil Ambani group to become NPA after Reliance Communication that owes over Rs 45,000 crore to 31 banks apart from China Development Bank and is an NCLT case now.
"As far as Reliance Naval is concerned, we are engaged with the lenders. We had given resolution offers to them and the vast majority of the lenders are supportive of a resolution," Ambani told reporters here. The company is awaiting the outcome of the lenders' meeting to decide how that will really proceed, he added.
Asked about the status of the resolution plan, since the Reserve Bank of India (RBI) deadline to firm up a resolution plan for stressed companies have ended this Monday, Ambani said, "You should ask the lenders. Our proposal is in front of them."
In its 12 February circular, the RBI had given banks 180 days starting 1 March, to come out with a resolution plan for stressed companies with exposure over Rs 2,000 crore and above. The deadline ended on 27 August. The lenders have two weeks to resolve around 70 accounts mostly in the power, EPC and telecom sectors, worth about Rs 3.8 trillion, else will have to be referred to NCLTs for bankruptcy proceedings.
To a query on why he chose to resign as director from Reliance Naval, Ambani said, "as per the Companies Act, one cannot sit on the boards of more than 10 companies, and I have chosen where I want to be."
Reliance Naval, which is into defence ship-building, had reported a threefold jump in net loss at Rs 408.68 crore from Rs 139.92 crore in the March 2018 quarter. For the full year to March 2018, its net loss almost doubled to Rs 956.09 crore from Rs 523.43 crore in previous year. In the March quarter, the IDBI Bank-led lenders consortium had invoked the pledged shares as well as the guarantees available with them after the company stopped servicing the debt.
It can be noted that Reliance Naval had informed the regulators in March that its auditors had expressed doubts about its ability to continue as a "going concern".
In a note in the FY18 earnings statement, its auditors Pathak HD & Associates had raised doubts about its ability to "continue as a going concern" citing cash losses, net worth erosion, loan recall back by secured lenders, winding up petitions by a few operating creditors among others.
The company, which was earlier known as Pipavav Defence & Offshore Engineering, was bought over by the Anil Ambani group in 2016 and renamed it as Reliance Defence & Engineering and later as Reliance Naval Engineering.
On the default on payment of NCD redemption amounting to Rs 133.38 crore, Ambani said, "the default was primarily due to regulatory delays of the MERC. All those bonds have been repaid today and no bonds exist now."
Replying to a query on when the company is planning to begin work on the Versova-Bandra sealink project, he said it will start from 1 October and as per the RFP, they have five years to complete the project.
Updated Date: Aug 30, 2018 08:00 AM