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NCLT rejects Adani Ports' late bid for insolvent Tuticorin Coal Terminal

The Mumbai bench of the National Company Law Tribunal (NCLT) has dismissed a request from Adani Ports and Special Economic Zone (APSEZ) to submit a delayed resolution plan for Tuticorin Coal Terminal, a company undergoing insolvency proceedings. According to a report by The Economic Times, the tribunal has instead directed that the resolution process proceed either with the evaluation of the existing plan submitted by Seapol Port or by inviting more bidders. Tuticorin Coal Terminal was admitted into the CIRP in February 2020 after defaulting on dues of nearly ₹90 crore owed to the Bank of India. As of now, its total admitted liabilities exceed ₹479 crore. Four-year delay in submitting revival plan The division bench, comprising judicial member KR Saji Kumar and technical member Anil Raj Chellan, took note of the significant time lapse since the Expression of Interest (EoI) was first issued in early 2020, more than four years ago. The tribunal observed that lenders have already spent considerable time exploring potential revival options for the troubled port operator. Given recent improvements in the company's financial performance during the corporate insolvency resolution process (CIRP), the tribunal pointed out that the asset could now attract a broader pool of investors, potentially offering better outcomes for creditors. Seapol Port only bidder under evaluation At present, Seapol Port remains the sole bidder under evaluation. The company's resolution plan is being considered by the committee of creditors (CoC) after Seahawk Lines failed to submit a final proposal, despite being given the opportunity. Adani Ports asks NCLT to allow competitive bidding Adani Ports argued that it had been included in both the provisional and final list of eligible bidders and that its entry into the process would promote value maximisation for the asset. The company emphasised that with only one proposal currently under consideration, allowing its bid would encourage competitive bidding in line with the objectives of the Insolvency and Bankruptcy Code. The resolution professional (RP), represented by Shloka Dikshit of Chandhiok & Mahajan, confirmed to the tribunal that the CoC was willing to assess Adani's resolution plan if the tribunal permitted its late entry. However, the bench ultimately ruled against granting such relief. The NCLT's decision underlines the importance of timely participation in insolvency proceedings, particularly as asset conditions improve. With Tuticorin Coal Terminal now showing signs of a turnaround, the process may attract renewed interest from additional bidders in the coming weeks. Tuticorin Coal Terminal redevelopment and liquidation Tuticorin Coal Terminal, a public-private partnership (PPP) project at VO Chidambaranar Port (VOC Port) in Tamil Nadu, was commissioned in June 2017 to handle coal for nearby power plants. Operations stopped in 2018 due to plant closures and an unsustainable 52.17 per cent revenue-sharing deal. Promoted by ALBA Asia and Louis Dreyfus Armateurs, Tuticorin Coal Terminal entered insolvency in 2019 with ₹355.79 crore in debt. After failed revival attempts, it became India's first port PPP project to head for liquidation. In July 2024, the port authority partnered with JSW to redevelop the site under a 30-year design, build, finance, operate, and transfer (DBFOT) model. Adani Ports had expressed interest in acquiring the insolvent project but faced setbacks and did not submit a resolution plan.