7 August 2019: The bankrupt Nagarjuna Oil Corporation (NOCL), which is under liquidation process after failing to find out a successful resolution plan, has recieved bids from three firms — Adani Ports and Special Economic Zone, Haldia Petrochemical and Accord Distillers and Brewers — to revive the company.
Nagarjuna Group said the bids were under scrutiny and verification, and liquidator would share the asset memorandum/valuation report to the bidders.
NOCL, which is setting up a 6 million tonne per annum (MTPA) petroleum and oil refinery project in Cuddalore in Tamil Nadu, had been ordered to undergo liquidation process after the company failed to get a successful resolution plan in the Corporate Insolvency Resolution Process (CIRP).
Subsequently, in December 2018, the National Company Law Tribunal (NCLT), Chennai, ordered liquidation of the company, which is an associate of Nagarjuna Oil Refinery (NORL).
However, considering the fact that the project could still go on if properly funded and managed, there was one more opportunity for the revival of the company through a scheme that has to be selected by the liquidator.
The liquidator had called for expression of interest (EoI) and to finalise a scheme submitted by interested company, after considering various aspects. IBC’s liquidation sections provide for a revival through a competitive bidding process on as is where is basis.
Haldia Petrochemicals and Gulf Petrochem were the two investors in the final round of resolution plan discussions earlier, but the proposals fell short of the liquidation value of `1,450 crore. There are around 15 lenders for NOCL.
The CoC, on April 19, 2018, rejected the resolution plan received from Haldia Petrochem as it offered the amount below the liquidation value. However, Haldia Petrochem and Gulf Petrochem filed application with the NCLT which directed the RP to submit their plans before the CoC.
The CoC asked Haldia Petrochemicals and Gulf Petrochem to improve their bids. However, in the lenders’ meeting held on July 24, the CoC members, in the case of Gulf Petrochem, opined that the net present value of the bid amount offered was far below the liquidation value and CoC was not in favour of the resolution plan submitted by Gulf Petrochem and with regard to the resolution plan of Haldia Petrochemicals.
Haldia Petrochemicals moved the NCLAT and its order. The appellate tribunal disposed of the appeal, giving the liberty to the company to submit a scheme in consonance with IBC. This paved the way for reviving NOCL even though it had gone into liquidation.