Edelweiss ARC appeals Bombay High Court ruling on Bharati Shipyard

Mumbai: Worried that its attempts to recovery money from cash-strapped Bharati Shipyard may be jeopardised, Edelweiss Asset Reconstruction Company (ARC) has filed an appeal against a recent Bombay High Court ruling that permitted bilateral settlements between the company and its unsecured creditors.

“In case Bharati Shipyard is unable to pay the creditors, the court will appoint a provisional liquidator to take charge of its assets,” said   Siby Antony, managing director and ceo of Edelweiss ARC. “We are trying to revive the company by raising around INR6bn, but such settlements hamper the process. If they happen, our plan to revive the company and recover our dues will be thwarted.”

A number of creditors, including Life Insurance Corporation (LIC), Shipping Corporation of India (SCI) and IDBI Capital Market, have all filed winding-up petitions against Bharati Shipyard in the Bombay High Court. However, these petitions, according to the court’s website, are yet to be admitted.

Last year, a consortium of lenders led by State Bank of India (SBI) had sold 60% of its total exposure of INR58bn ($915m) to Edelweiss ARC, while 11 out of 23 banks had sold loans amounting to INR34.80bn.

Thereafter, nine unsecured lenders filed separate winding-up petitions against Bharati Shipyard, and the court directed the company to settle claims bilaterally. It also said that, in the event the company defaulted, the winding-up petition would be revived “without reference to this court”.

Bharati Shipyard had reported losses of INR8.79bn crore in 2013-14, following upon losses of INR4.92bn reported in 2012-13. The company has remained in the red in 2014-15, with net losses in the third quarter (October to December 2014) being INR988m on revenues of INR29.8m. Its full year’s performance for fiscal 2014-15 is still to be reported.


Shirish Nadkarni

Shirish Nadkarni is a management consultant and freelance international journalist, who has been writing on all spheres of Indian business for the past three decades for a number of reputed overseas publications. An avid sportsman, Nadkarni has represented India in international veterans' badminton since 1997, and was the 55+ age group doubles world champion in 2005.
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