The National Company Law Tribunal (NCLT), Chennai has approved the resolution plan submitted by Haldia Petrochemicals for Nagarjuna Oil Corporation Limited (NOCL).
Liquidators V of NOCL. Mahesh confirmed the development, but a copy of the final order is awaited.
NOCL’s refinery project at Cuddalore was scheduled to go on stream in 2012, but in 2011 it faced several delays in the form of a cyclone. The project cost increased from ₹ 3,500 crores to 15,000 crores as a result of time and cost.
A consortium of 17 banks, which funded the project, was brought in an additional ₹ 7,000 crore in loans as part of the restructuring plan. However, it did not materialize and bankruptcy proceedings were initiated against NOCL. The project was the largest for Tamil Nadu and the state government had offered tax incentives during a 2015 global investors meeting.
NCLT ordered liquidation of NOCL in 2018, after the resolution plans failed.
Later, Haldia presented a resolution plan under section 230 of the Companies Act. Section 230 is a mechanism to ensure institutional settlement of disputes between creditors and the company. This ensures that the company has a chance to protect itself from bankruptcy or liquidation by bargaining with at least a majority of creditors.
In September 2019, Haldia Petrochemicals signed an MoU with the Government of Tamil Nadu to invest approximately Hal 50,000 crore in Cuddalore district for the construction of a petrochemical complex.
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