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Adani Port among 3 firms interest in reviving Nagarjuna Oil Corporation

      08/08/2019

Three companies — Adani Ports and Special Economic Zone Ltd, Haldia Petrochemicals Ltd and Accord Distillers and Brewers Pvt Ltd — have evinced interest in the assets (on ‘as is where is’ condition) of Nagarjuna Oil Corporation Ltd (NOCL), Cuddalore, which is under liquidation.

The asset is considered a prized possession for its location and the huge land parcel size of 2,158 acres.

Reliable sources told that the three companies have submitted their Expression of Interest (EoI) based on an advertisement issued in July by NOCL liquidator, V Mahesh, who will after scrutiny and verification, share the Asset Memorandum/Valuation Report to the three bidders.

The liquidator will then form a Stakeholder Consultation Committee as per 31A of the Insolvency and Bankruptcy Board of India (IBBI) liquidation process regulations to advise him.

However, it remains to be seen if a Scheme u/s 230 of the Companies Act is submitted by the bidders and approved by the committee. If confirmed by the National Company Law Tribunal, it could well be the first case of revival under liquidation, sources said.

NOCL revival assumed significance after disposal of an appeal of Haldia Petro by the National Company Law Appellate Tribunal (NCLAT), which asked the liquidator to proceed u/s 230 read in consonance with the Insolvency and Bankruptcy Code (IBC).

Recent amendments to the IBBI liquidation regulations mandate disposal of the liquidation process within 190 days for ‘Scheme’ and distribute the proceeds in line with Water Fall Mechanism.

The 3,500-crore NOCL project in Cuddalore, Tamil Nadu, was to go on stream in 2012 but various delays escalated the cost by nearly three times before the project came to an abrupt halt in December 2011 following a cyclone.

A consortium of 14 banks that funded the project were to bring in an additional 7,000-crore debt as part of a restructuring plan, which, however, did not materialise. Insolvency proceedings were initiated against NOCL by an operational creditor.

The project was designated as the anchor unit of the Petroleum, Chemicals and Petrochemical Investment Region to be established in Cuddalore and Nagapattinam districts.

The company has 2,158 acres of un-litigated contiguous piece of industrial land, ideally located near to the sea but out of bounds of Coastal Regulation Zone regulations; near to railway siding and access to Puducherry airport apart from Karaikal port.

The infrastructure facilities already done in the plant site with clear layout and utilities such as desalination plant, power plant and trenches for cabling, storm water flow and discharge makes the unit a good investment proposal for bidders.

Sources said that the State government is willing to extend the concessions based on the quantum of investment as applicable for Ultra Mega Projects in the State. The project, if funded adequately, can commence operations in three years, said sources.