The beleaguered Rs 4,700-crore Nagarjuna Oil refinery project at Cuddalore in Tamil Nadu has entered the liquidation process under the Insolvency and Bankruptcy Code (IBC) after the 270-day deadline, offered by National Company Law Tribunal’s Chennai bench to identify a successful bidder, ended on Friday.
With no successful bidder or a resolution plan in place, the Committee of Creditors (CoC) has recommended liquidation and the same has been informed by the resolution professional (RP) to NCLT on Friday evening. Nagarjuna Oil Corporation’s (NOCL’s) books show a secured debt of Rs 8,000 crore and an unsecured debt of Rs 800 crore. The four bidders which came forward — BPCL, Citax Ventures, Gulf PetroChem and Haldia Petrochemicals — submitted bids lower than Rs 1,450 crore set as liquidation valuation, hence rejected.
Nagarjuna Oil — backed by Nagarjuna group, Tatas and Trafigura — planned to set up a 6 mtpa (metric tonnes per annum) oil refinery in Cuddalore. This project was later recommended to be the anchor client for the Petroleum, Chemicals & Petrochemicals Investment Region (PC&PIR) by the Tamil Nadu government to the Centre, which too accepted and declared the Cuddalore zone as a PC&PIR region.
“The CoC was not happy with the resolution plan that successful bidders had submitted, as they found them far below liquidation value. It is sad that NOCL is going for liquidation. May be something good can happen in the liquidation process itself,” NOCL’s RP, S Rajendran, appointed by the NCLT, told TOI. “The process will take a few days and NCLT will have to appoint a liquidator. I have declined to take up that role, since I came here to ensure a resolution,” Rajendran added.
On Friday, the NCLT dismissed a petition by employees seeking to ensure their rights, as the process of liquidation was out to take place, on certain grounds. Another petition moved by the RP before the NCLT to direct Chennai Corporation, which had sealed NOCL’s office in Chennai for non-payment of dues on Monday this week, was posted for further hearing, with a notice to the Chennai Corporation, it is learnt.
