Reliance Naval says not worried about IFC’s insolvency petition

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Reliance Naval and Engineering, the defence production arm of the Anil Ambani group, said it was not worried about the petition filed by bankruptcy petition filed by IFC.

It said the international organization does not have its loan secured against the assets of the company. Unsecured creditors come lower in priority compared to secured creditors, and also face more difficulties in recovering their money if the debtor refuses to pay up.

“We would like to clarify that as legally advised, there are no merits in the application filed by IFC before NCLT, Ahmedabad as it is a unsecured creditor,” said Reliance Naval and Engineering, calling the petition “unwarranted and premature”.

It said it continues to enjoy the support of the secured creditors.

“The 25 secured lenders of the Company have also requested IFC that the matter be resolved outside the NCLT. The Company will take all necessary steps to safeguard the interests of all stakeholders,” the company added.

Reliance Naval and Engineering, formerly known as Pipavav Shipyard, is a shipbuilding company headquartered in Mumbai with its shipyard in in Pipavav, Gujarat.

Pipavav Shipyard was established as a wholly owned subsidiary of SKIL Infrastructure in 1997.

In 2005, with funding from major Indian financial institutions, the company was spun off and registered as Pipavav Shipyard Limited.

Pipavav Shipyard Limited raised additional financing from a number of private equity investors in 2007.

The company went public in 2009 with listings on the BSE and the NSE. The company was renamed after Anil Ambani Group’s Reliance Infra became the biggest single shareholder in recent years.