The National Company Law Tribunal (NCLT), Chennai has approved the resolution plan submitted by Haldia Petrochemicals for Nagarjuna Oil Corporation Ltd. (NOCL).
V. Mahesh, liquidator for NOCL, confirmed the development, but the final order copy is awaited.
NOCL's refinery project in Cuddalore was supposed to go on stream in 2012, but faced numerous delays, including in the form of a cyclone in 2011. Time and cost overruns resulted in the project cost escalating to ₹15,000 crore from ₹3,500 crore.
A consortium of 17 banks, that funded the project, was to have brought in an additional ₹7,000 crore debt as part of a restructuring plan. However, it did not materialise and insolvency proceedings were initiated against NOCL. The project was one of the biggest for Tamil Nadu and the State government had offered tax incentives during the global investors meet held in 2015.
NCLT had ordered liquidation of NOCL in 2018, after resolution plans failed to materialise.
Later, Haldia submitted a resolution plan under section 230 of Companies Act. Section 230 of the is a mechanism to ensure institutional settlement of disputes between creditors and the company. It ensures that the company has a chance to save itself from insolvency or liquidation by entering into a deal with at least a majority of creditors.
In September 2019, Haldia Petrochemicals signed an MoU with the Tamil Nadu Government to invest almost ₹50,000 crore in Cuddalore district for building a petrochemical complex.
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