National Company Law Tribunal gives Dighi Port to JNPT

Jawaharlal Nehru Port Trust's (JNPT) bid for beleaguered Dighi Port Ltd has been approved by the National Company Law Tribunal (NCLT).

Balaji Infra Projects Ltd, Infrastructure Leasing & Financial Services or IL&FS Group and Maharashtra Maritime Board (MMB) are the promoters of Dighi Port Ltd.

As per 2002's concession agreement, Balaji Infra Projects was awarded the project on a Build, Own, Operate, Share and Transfer basis for a period of 50 years.

Earlier this month, NCLT's Mumbai Bench in its judgement observed that the resolution plan of JNPT is more than 85% of the average liquidation value and is also higher than the average fair value arrived at by the two registered valuers. "It is also further observed that this is one rare resolution plan, wherein the plan outlay is more than the fair value," the judgement said.

In September 2018, Expression of Interests were invited and submitted wherein 14 bids were received. Thereafter, three of them were shortlisted, with Adani Ports Special Economic Zone Ltd's (APSEZ) bid being the highest, followed by JNPT and a consortium of Veritas (India) Ltd along with UV Asset Reconstruction Company Ltd.

In November 2018, JNPT, India's biggest container port, had quoted an upfront payment of over Rs 600 crore apart from infusing capital to improve port's operations.

Financial creditors had made a claim of Rs 3,074.51 crore with Dighi Port, while operational creditors have to be paid Rs 26.36 crore and MMB is to be paid Rs 15.38 crore. Secondly, Rs 190.78 crore is also needed to be invested as part of equity Infusion for improving port operations.

Adani Group's resolution plan was rejected by 99.38% of the Committee of Creditors, after it was put to vote. Simultaneously, JNPT being the second-highest bidder, its proposal was approved by 99.38%. The Committee of Creditors has a total of 18 lenders led by Bank of India. Some of the other lenders include IL&FS Maritime Infrastructure Co, IL&FS Financial Services, Punjab National Bank, Canara Bank, Indian Overseas Bank, LIC, United Bank, among others.

One of the arguments presented to support APSEZ's rejection was that one of the Adani Group's namely Adani Wilmar had withdrawn from its resolution plan even though it was the highest bidder in the case of Ruchi Soya Industries Ltd.

Veritas Consortium as well as APSEZ had moved the NCLT to be in the fray, but their petitions were rejected by the Mumbai Bench. Thus leaving only JNPT in the fray.

With this judgement, it is the first instance of a central government-owned port buying a private port under the Insolvency and Bankruptcy Code process, said JNPT's solicitor Mustafa Kachwala. Apart from Kachwala, the other solicitors for JNPT were Pooja Mahajan and Ketki Pansare under the instructions of Kachwala Misar & Co.

For the last few years, JNPT has been looking to expand its presence along Maharashtra's coastline. This move is part of its strategy to have a few smaller ports along the coast until a bigger port at Vadhavan (near Dahanu) comes up.