Reliance Naval and Engineering Ltd. lenders staring at around 95 per cent haircut - Know details of bids submitted

In a major development, the lenders of Reliance Naval and Engineering Ltd. (RNEL) are staring at a haircut of around 95%, as all the three bidders have submitted exorbitantly low bids for the company.

At a Committee of Creditors (CoC) meeting held yesterday, all the three bids were valued by the two independent valuers and presented to the CoC. The independent valuers have found all the bids legally compliant with the NCLT norms.

See Zee Business Live TV Streaming Below:

Three companies i.e. Hazel Merchantile of Veritas Group, JSPL of Naveen Jindal Group, and a consortium of GMS -Dubai and Besiktas Shipyard - Turkey have submitted bids for Reliance Naval and Engineering Ltd.

According to the banking sources privy to the development, the value of Hazel Mercantile's bid is Rs. 730 Cr., while JSPL has submitted a bid of around Rs. 340 Cr.

The third bidder, GMS of Dubai along with its Turkish partner, Besiktas Shipyard  has offered an upfront cash of Rs. 50 Cr.

The total admitted debt of Reliance Naval and Engineering Ltd. is Rs 12,000 Cr. Therefore, the highest bid of Rs. 730 Cr. by Hazel Mercantile will ensure only around 6% recovery for the lenders.

All the bids are even far below the liquidation value and fair value of Reliance Naval and Engineering Ltd.

According to sources, the lenders have fixed the liquidation value at Rs 1800 Cr., and fair value at Rs 2500 Cr.

IDBI is the lead banker of Reliance Naval and Engineering Ltd.

Since all the three bidders have been found legally compliant, the CoC will now appoint an independent consultant to start the commercial negotiations with all the three bidders.

The entire debt of R-Naval has been transferred to National Asset Reconstruction Company (NARCL). The resolution of R-Naval debt will take place through NARCL AMC. The lenders of Reliance Naval have already provided for 100 percent of the debt in their books, for the last 8 years.