Shares Of Reliance Naval Drops By 5% As IDBI Moves NCLT

IDBI Bank Ltd. has moved the National Company Law Tribunal against Reliance Naval and Engineering Ltd. seeking debt resolution under the Insolvency and Bankruptcy Code.
Reliance Naval owes Rs 5,349.17 crore to a clutch of lenders as on March 2018 of which the dues to IDBI Bank alone is about Rs 1,250 crore. The state-run lender filed an appeal with the Ahmedabad bench of the NCLT to seek debt arbitration against the shipbuilder, according to a stock exchange filing. A similar application was filed by another lender, IFCI Ltd., in November, which is pending admission.
If the Ahmedabad bench of the National Company Law Tribunal (NCLT) admits the petition filed by IDBI on 5 September and starts the insolvency process under India’s bankruptcy law, the bids submitted by Reliance Naval runs the risk of being rejected by the Indian Navy, leaving only L&T in the fray for the project.
Shares of Reliance Naval and Engineering lost 5 percent. The stock fell 4.95 percent to hit a low of Rs 15.35 on the BSE.