Adani Ports’ late bid for insolvent Tuticorin Terminal rejected by NCLT
MUMBAI : In a significant development regarding the insolvency resolution of Tuticorin Coal Terminal, the Mumbai bench of the National Company Law Tribunal (NCLT) has dismissed an application filed by Adani Ports and Special Economic Zone seeking to submit a delayed resolution plan. The tribunal has instead indicated a preference for either evaluating the existing resolution plan submitted by Seapol Port or inviting fresh bids from a wider pool of investors.
The division bench, comprising judicial member KR Saji Kumar and technical member Anil Raj Chellan, noted the considerable time that has passed – over four years – since the Expression of Interest (EoI) was initially published. They observed that lenders have been actively exploring various options for the company’s revival and the resolution of its insolvency during this period.
The bench also took into account the improved operational performance of the debt-laden borrower during the Corporate Insolvency Resolution Process (CIRP), a fact acknowledged by Adani Ports itself. “During the arguments, the counsel for the applicant (Adani Ports) brought to our notice that the operations of the corporate debtor (Tuticorin Coal Terminal) have improved drastically during the CIRP period, and the corporate debtor has started generating profits now,” the tribunal stated in its order. “Hence, we cannot ignore the changes in the economic conditions that would generate further interest by more participants than one.”
Presently, lenders are evaluating a proposal from Seapol Port, which remains the sole bidder for the asset.
Tuticorin Coal Terminal was admitted under the CIRP in February 2020 following a default on dues of approximately ₹90 crore owed to the Bank of India. The company currently has admitted liabilities exceeding ₹479 crore.
An email query sent to Adani Ports & SEZ seeking comment remained unanswered at the time of filing this story.
Beyond Adani Ports & SEZ, other entities including Seahawk Lines, Seapol Port, and Jindal Power had previously expressed interest in acquiring Tuticorin Coal Terminal through the insolvency resolution process.
Arguing for Adani Ports & SEZ, Animesh Bisht of Cyril Amarchand Mangaldas contended that the company was included in both the provisional and final lists of eligible bidders. He argued that allowing Adani Ports to submit a resolution plan would contribute to the maximization of the asset’s value. “Since no resolution plan has been received from Seahawk despite being allowed by this tribunal, the CoC is presently only considering one resolution plan, which has been submitted by Seapol,” Adani’s counsel argued. Therefore, he contended, granting relief to Adani Ports would ensure fair competition and align with the Insolvency and Bankruptcy Code’s objective of maximizing the value of the corporate debtor’s assets.
Shloka Dikshit of Chandhiok & Mahajan, appearing for the resolution professional (RP), confirmed that the Committee of Creditors (CoC) was willing to consider Adani Ports’ plan, provided the tribunal granted the necessary permission for the delayed submission. However, the NCLT ultimately ruled against allowing the late submission, emphasizing the need for timely participation in the resolution process, particularly given the improved financial health of the terminal
