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Karaikal Port admitted for insolvency, Adani Ports & SEZ frontrunner

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PUDUCHERRY : The Chennai bankruptcy court recently admitted Karaikal Port for insolvency proceedings after it defaulted on payment of about Rs 2,400 crore dues to a lender. Adani Ports and Special Economic Zone (APSEZ) is the frontrunner to acquire the bankrupt company, two people aware of the matter said.

In a rare instance, the National Company Law Tribunal heard and admitted a case for insolvency same day the lender, Omkara Asset Reconstruction Company applied.

The order was passed by a division bench of Justices Sameer Kakar and R Sucharitha Omkara ARC had acquired Rs 2,059 crore loan to Karaikal Port from Edelweiss ARC in November last year at an uncontested Swiss auction, said the people cited above. This acquisition was backed by Adani group company APSEZ, they said.

Adani group did not respond to matter.

APSEZ is the largest operator in the port infrastructure business in India.

Edelweiss ARC had sold the loan to Karaikal Port under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (Sarfaesi) Act. According to sources, Omkara ARC had acquired the loan for Rs 1,500 crore, implying a recovery of 73 paise on a rupee for Edelweiss ARC.

Marg Ltd, promoter of Karaikal Port, had filed a petition at Madras High Court objecting to the loan sale from one ARC to another under Sarfaesi where only banks, financial institutions, and ARC can bid, thus limiting corporates’ scope of participation. The court dismissed the case.

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