PSUs like HPCL and ONGC and foreign investors like Shell have made moves to acquire NOCL but none of them fructified.
"A couple of strong bidders are still in the fray and they have asked for additional time to submit their bids to the RP, which will be evaluated by the Committee of Creditors (COC). The bid found suitable by the COC will be sent to the NCLT (National Company Law Tribunal) for approval," said a source close to the development.
The RP was not available for a comment.
In response to an email seeking comments, Nagarjuna Group Chairman K S Raju said, "It is a fact that there are several parties seriously interested in NOCL. Being a large and complex project, it does take time for parties to conduct due diligence and, hence, the need to give additional time. The fact that they are itself proves that there is a high prospect for a successful resolution within the available time frame and the NOCL refinery project, which is a national asset, will be built and will have a bright future. The resolution professional, bankers and all stakeholders are working diligently toward this."
With the 180-day deadline set by the NCLT for the resolution process ending on January 20, the COC can seek a single extension of 90 days, which could end on April 20, 2018. The COC has to select a resolution plan and submit it to the NCLT a month before the last date of the resolution period. If there are no successful bidders, the company would be liquidated, which might have an impact on the promoters' guarantee to the extent of Rs 50 billion, said sources.
Responding to this, Raju said, "It is common knowledge that if a resolution does not take place, any company would go into liquidation. We do not believe that there is a cause for concern in our case. In any case, our fertiliser business is not directly connected with NOCL".
The company has around Rs 90 billion of debt, of which around Rs 80 billion is in the form of bank loans, by around 15 banks. Salaries to the tune of Rs 500-600 million are also pending, which might be cleared as part of the resolution plan. Once the recovery is made and the vendors, employees and others are repaid, the shareholders would be paid based on the COC's approval.
The Cuddalore refinery project, for which the construction work started in 2009, had been partially completed in December 2011, when a cyclone and shortage of funds stopped work. The plant has the capability of meeting Euro-VI requirements with some additions.
Most of the statutory clearances for the refinery are in place, with a few requiring renewal. Land is also available for expansion up to 30 MMTPA. VAT benefit in the form of structural financial assistance is also available. VAT refund of up to Rs 180 billion (minimum is Rs 124 billion and maximum is Rs 180 billion) is available as per a government order issued after the Tamil Nadu Government's Global Investors Meet 2015.
Since 2012, NOCL has been looking for a strategic investor to pump in fresh equity and revive the project. It has been reported earlier that according to sources, in order to commence the project, it would require around Rs 140-150 billion, including debt and principal amount.