Karaikal Port Insolvency: Karaikal Port admitted insolvency, Adani Port & SEZ predecessor | Whuff News

A Chennai bankruptcy court on Thursday admitted Karaikal Port for insolvency proceedings after it defaulted on payment of about Rs 2,400 crore owed to lenders. Adani Ports and Special Economic Zone (APSEZ) is a front-runner for bankruptcy court, two people familiar with the matter told ET.

In a rare instance, the National Company Law Tribunal heard and admitted an insolvency case on the same day the lender, Omkara Asset Reconstruction Company applied.

The order was passed by a division bench of Justices Sameer Kakar and R Sucharitha.

Omkara ARC had secured a Rs 2,059 crore loan to Karaikal Port from Edelweiss ARC in November last year in an uncontested Swiss auction, the people cited above said. The acquisition is backed by Adani group company APSEZ, they said.

Adani Group did not respond to ET’s request for comment.

APSEZ is the largest operator in port infrastructure business in India.

Edelweiss ARC has sold the loan to Karaikal Port under the Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest (Sarfaesi) Act.

According to sources, Omkara ARC has secured a loan for Rs 1,500 crore, implying a recovery of 73 paise on the rupee for Edelweiss ARC.

Marg Ltd, the promoter of Karaikal Port, has filed a petition in the Madras High Court challenging the sale of loans from one ARC to another under Sarfaesi where only banks, financial institutions and ARCs can bid, thus limiting the scope of corporate participation. The court dismissed the case.

Subsequently, the Supreme Court allowed Marg promoter GRK Reddy to file a review petition in the Madras High Court, which again dismissed the matter in November last year.

APSEZ has maintained an aggressive acquisition policy and has acquired ports such as Krishnapatnam Port Company and Gangavaram Port Ltd and several logistics businesses over the past few years. Taking note of this, ICRA Ratings in November 2021 said, “Any significant debt-financed acquisition that will impact the value delivery plan will be a rating sensitivity.”

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