The National Company Law Tribunal (NCLT) has directed the insolvency resolution professional (IRP) for ABG Shipyard Ltd to consider Liberty Group’s bid in the third round for the debt-laden shipbuilder.
The interim order of NCLT on Tuesday came on a petition by the London-based metals group seeking to overturn its disqualification in the second round under Section 29 (a) of the Insolvency and Bankruptcy Code (IBC).
The IRP and the committee of creditors led by ICICI Bank cited non-payment of some $2.8 million it owed EXIM Bank to disqualify Liberty. While Liberty disagrees with the claim of EXIM Bank, it paid the amount “under protest” to participate in the third round.
Section 29 (a) of the IBC bars certain persons and entities from bidding for stressed assets, including undischarged insolvents, wilful defaulters and anyone with a non-performing loan.
“The question is on the legality of the bid put by Liberty in the second round. There is an illegality which has been challenged. It is not yet decided. Whereas, the third bid is currently valid. With the interim order of the NCLT, the IRP can go through the third bid and work on it,” a person briefed on the matter said.
The resolution of ABG Shipyard was to be completed by April 28, but it has since been extended.
The lenders have set a liquidation value of ₹2,200 crore for the yard that owes some ₹18,245 crore to a clutch of banks led by ICICI Bank.
Liberty Group led by Indian-born businessman Sanjeev Gupta was the only bidder in all the three rounds of bidding held.
It’s bid in the first round was not considered because it could not complete various compliances on time.