IFCI files bankruptcy case against Reliance Naval

MUMBAI: State-run IFCI has filed for proceedings against Reliance Naval and Engineering under the bankruptcy code to recover its dues which the company dismissed as ‘premature.’ This would be a blow to the Anil Ambani owned a firm which was planning to make it big in the defence sector by building ships for the Indian navy.

The case filed in the Ahmedabad bench of the court under Section 7 of IBC on 27 November. “The outstanding amount due from Reliance Naval was a legacy loan borrowed by the erstwhile Pipavav Defence and Offshore. IFCI has recalled the entire loan and approached the NCLT for the same,” said a lawyer aware of the case. The exact amount of the loan could not be immediately ascertained.

No IFCI official could be reached immediately. The first hearing of the case will be held on 8 December.


In a clarification on the BSE, Reliance Naval said that the case against the company does not stand. “There are no merits in the application filed by IFCI as it is an unsecured creditor. The action of IFCI is unwarranted and premature. The 25 secured lenders of the company have also requested IFCI that the matter be resolved outside the NCLT. The company will take all necessary steps to safeguard the interest of all stakeholders,” Reliance Naval said.

Lenders led by SBI have lent close to Rs 9,000 crore to Reliance Naval and Engineering, the erstwhile Pipavav Defence which was acquired by Reliance Infrastructure in 2015. The loans have been classified as special mention account-2 or SMA-2 with banks for more than three years.

SMA-2 are those where bank have not received payment from the borrower for over 60 days. Interest on loans not serviced for 90 days are classified as non-performing.
Bikki Raveendra Babu and Manorama Kumari, member judicial at NCLT Ahmedabad have issued an interim order saying the respondent (Reliance Naval) shall file its objection, if any, within one week of serving a copy in advance to petitioner (IFCL).