BPCL bids for Nagarjuna Oil but sets terms

The Committee of Creditors (CoC) for Nagarjuna Oil Corporation (NOCL), appointed by the National Company Law Tribunal (NCLT), had a meeting here on Friday to consider the bids of Bharat Petroleum Corporation (BPCL) and Citax ventures. According to sources (who were aware of this development), BPCL was the only one to submit the bid security amount of Rs 10 crore.

Citax Ventures failed to submit the bid amount, and its bid was not considered by the CoC.

Citax Ventures, U.K., is promoted by S. G. Srinivas, and this is the fourth attempt by him to bring in funds to revive NOCL. Earlier, he made an attempt through Singapore-based Netoil (Singapore) (PTE). However, it failed eventually.

Sources said that BPCL made a presentation to the bankers. BPCL had reportedly made it clear that it was not proposing to acquire the entire company since many of the agreements between NOCL and the BOOT companies (all Hyderabad-based) were disadvantageous to NOCL.

Further, BPCL pointed out that SEW, one of the BOOT companies, had filed a petition in NCLT, Chennai, against the Resolution Professional (RP) and NOCL. “More such petitions have been filed in the recent days. BPCL would have to fight these cases if it took over NOCL as a company,” these sources added.

While the bid amount was not known, sources said that BPCL did not agree for the liquidation valuation of around Rs 1,500 crore. BPCL contended that out of the 2,100 acres with NOCL, only around 500 acres were owned by NOCL and the balance 1,600 acres belonged to SIPCOT. If NOCL is liquidated, the land owned by SIPCOT cannot be sold by the lenders. Experts tracking this said that the land cost would be more than Rs 6 crore and that the old machineries will be worth Rs 50-60 crore.

BPCL had also believed to have informed the creditors that it was not interested in completing the outdated 6 million tonne refinery project, but would implement projects in oil and gas sector only. It may be noted, in 2013 oil and gas major Shell looked at this project along with ONGC but did not conclude it.

The resolution plan has to be selected and sent to NCLT by April 20, 2018, as per the recent amendments to the Insolvency and Bankruptcy Code (IBC) and its regulations.

CoC, sources said, felt that the BPCL’s bid was too low. CoC would have to call for fresh bids if BPCL did not increase its offer to the lenders, they added. BPCL took strong objection to this on the ground that other potential bidders now would know the details of its bid terms and would have an unfair advantage. “The ball is now in the Resolution Professional’s court,” a source said.

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Printable version | Jul 31, 2021 5:02:22 AM |

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