Welspun Corp has emerged as the winning bidder of the shipyard of distressed borrower ABG Shipyard at an auction for a consideration of ₹659 crore. Welspun Corp and its subsidiary Nauyaan Shipyard would acquire the ABG asset at Dahej, in Gujarat. The asset is spread over 165 acres of leasehold land with 1,000 m of water frontage.
Once owned by Rishi Agarwal, ABG Shipyard is undergoing liquidation after lenders failed to find a buyer under insolvency proceedings. It is among the 12 initial companies the Reserve Bank of India (RBI) had directed lenders to refer to the bankruptcy court for resolution.
In an order dated August 26, the Supreme Court directed the liquidator of ABG Shipyard to conclude the sale of specific assets of the company within four weeks from the date of the order. Welspun and its subsidiary, which emerged as the successful bidder, paid ₹659 crore purchase consideration on September 21, a notice to the stock exchanges said.
Welspun has proposed using ABG Shipyard’s facilities for defence and commercial shipbuilding, green steel, ship breaking and ship repair, among others.
In a separate statement to the media, the Enforcement Directorate (ED) said it had attached shipyards, agricultural land, commercial properties, and bank deposits worth ₹2,747 crore. The assets are attached following allegations of bank loan fraud that are under investigation.
The attachment notice was issued to the liquidator soon after he issued a sale certificate for transferring the specific assets to winning bidders.
In a statement to the exchange, Welspun said it “proposes to take appropriate action in light of the above, including the immunity available to the specified assets sold under liquidation.” It further said that the attachment notice is issued even as provisions of the Insolvency and Bankruptcy Code bar investigative agencies from attaching or confiscating properties of corporate debtors sold as part of liquidation assets.
On Tuesday, the Central Bureau of Investigation (CBI) arrested ABG Shipyard promoter Rishi Agarwal on an allegation of money laundering. The company had claims of ₹22,059 crore from verified creditors.
Agarwal was arrested following a complaint filed by the State Bank of India, which had an outstanding loan of more than ₹2,400 crore.
The CBI said in a statement that the company allegedly transferred funds raised from banks to its related parties. The money was invested in an overseas subsidiary for the purchase of assets in the name of its related parties, the CBI said.
