The Mumbai bench of the National Company Law Tribunal (NCLT) has disposed of two separate insolvency resolution applications filed by the State Bank of India and IDBI Bank against Mumbai Metro One. The borrower is a joint venture between Anil Ambani-promoted Reliance Infrastructure (RInfra) and Mumbai Metropolitan Regional Development Authority (MMRDA).
On Monday, a division bench led by judicial member Lakshmi Gurung and technical member Charanjeet Singh Gulati disposed of the insolvency resolution applications in an oral order after lawyers appearing for all the parties informed the tribunal about an OTS (one-time settlement) agreed upon by all lenders. The detailed order was not uploaded until the publication of this report.
Mumbai Metro One was the first metro project awarded in the country on a public-private partnership (PPP) basis and entails the design, financing, construction, operation and maintenance of about 12 km elevated metro operating between Versova and Ghatkopar with 12 stations en route, connecting the western and central suburbs of Mumbai.
On March 20, MMRDA, an apex body for planning and coordinating development activities in Mumbai, had told the bankruptcy court that Mantralaya has decided to settle the dues with the lenders of Mumbai Metro One.
In October last year, IDBI Bank approached the tribunal seeking to initiate insolvency resolution proceedings against the company under the Insolvency & Bankruptcy Code (IBC) after MMOPL failed to repay dues of Rs 133.37 crore. In August, SBI approached the tribunal after the company defaulted on its dues of Rs 416 crore.
The other lenders to the metro line operator include Canara Bank, Bank of Maharashtra and India Infrastructure Finance Co (UK).
“The state government has decided at the right time to settle the dispute as this is one of the most important infrastructure projects for the city,” said Nishit Dhruva, managing partner of law firm MDP & Partners. “At a time when connecting metro lines and other transportation infrastructure projects are getting ready, this will set a precedent in future such disputes.”
Originally, the Versova-Andheri-Ghatkopar corridor was awarded by MMRDA through a global competitive bidding process on a public-private partnership framework to the Reliance Infrastructure consortium in 2007.
Later, a special purpose vehicle, namely, Mumbai Metro One, was incorporated for implementation of the project. Currently, Anil Ambani-led Reliance Infrastructure Ltd owns a 74% stake in the metro line operator, while MMRDA holds the remaining 26% stake in the venture.
On Monday, Reliance Infrastructure closed 1.19% up at Rs 200.15 on the BSE.
