Mumbai: The Mumbai bench of the National Company Law Tribunal (NCLT) has disposed of corporate insolvency proceedings against Mumbai Metro One Pvt. Ltd, a unit of Reliance Infrastructure, following a one-time debt settlement agreement between the lenders and the company, as per regulatory filings.
The resolution could pave the way for the Maharashtra government to buy out Reliance Infrastructure’s stake in the capital city’s busiest metro rail line.
State Bank of India (SBI) and IDBI Bank had separately moved the bankruptcy court against MMOPL upon non-payment of dues to the tune of ₹416 crore and ₹133 crore, respectively. The two banks are part of a consortium of six lenders who lent a principal amount of ₹1,711 crore for the Mumbai Metro project.
“We wish to inform you that the Section 7 petitions of SBI and IDBI Bank are disposed-off by NCLT Mumbai in view of OTS issued by all lenders,” Reliance Infrastructure Ltd said in a stock exchange filing on Monday.
MMOPL is a 74:26 joint venture between Reliance Infrastructure Ltd and Mumbai Metropolitan Regional Development Authority (MMRDA). It operates the Mumbai Metro One line between Versova, Andheri, and Ghatkopar in the city.
Last month, the Maharashtra cabinet cleared the purchase of Reliance Infrastructure’s 74% stake in MMOPL, valuing the stake at ₹4,000 crore. The valuation was arrived at by a committee led by former state chief secretary Johny Joseph using the discounted cash flow model.
Reliance Infrastructure has been looking to exit the Mumbai Metro project since 2020 but disagreements over valuation had stalled the transaction.
Mumbai Metro, inaugurated in June 2014, spans 11.4 kilometers between Versova, Andheri, and Ghatkopar, serving as the city’s oldest and busiest metro line. Daily ridership on the Metro One line exceeds 450,000 commuters.
The stock of Reliance Infrastructure closed 0.61% higher on the BSE at ₹199 on Monday. Benchmark Sensex ended the session 1.14% lower amid geopolitical tensions.
The Reliance Infrastructure scrip has been volatile of late, having lost over 33% in the last five trading sessions after the Supreme Court last Wednesday overturned an order favourable to a unit of the company.
The apex court reversed its previous order in which it had asked the Delhi Metro Rail Corporation (DMRC) to pay an arbitration award of ₹8,000 crore to Delhi Airport Metro Express Pvt Ltd (DAMEPL), a special purpose vehicle under Reliance Infrastructure. The top court also ordered DAMEPL to refund the money it had already received from DMRC – reportedly to the tune of ₹3,300 crore.
Reliance Infrastructure later clarified that the order does not impose any liability on it and that it had not received any money from DMRC or DAMEPL under the arbitration award.
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Published: 15 Apr 2024, 07:03 PM IST