Russia has confirmed that it is keenly looking forward to acquire the Indian shipbuilding company Reliance Naval and Engineering Limited (RNEL), which owns the Pipavav Shipyard in Gujarat. The Russian United Shipbuilding Corporation could finalize the deal this year only.
According to the defense news site Janes, the Russian embassy said in a statement that USC is currently auditing Mumbai-based RNEL and assessing potential investment opportunities.
“USC [has] passed the accreditation procedure, which provided access to electronic accounts with financial and economic documents related to the Indian company,” said the embassy. “[USC] is currently conducting due diligence of RNEL’s condition and assessing parameters of possible investments”, added the embassy’s statement.
RNEL, which has a government permit to build warships, is being sold under the Insolvency and Bankruptcy Code (IBC) to recover unpaid dues of ₹43,587 crores.
Of this, the resolution professional (RP) has admitted ₹10,878 crores of dues of financial creditors while another ₹32,693 crore is under verification. Operational creditors have claimed another ₹1,922 crores from the company, of which only ₹485 crore has been admitted.
It has been reported in the past that the Russian United Shipbuilding Corporation is the only serious contender for the acquisition of RNEL. According to Janes, USC is anticipated to finalize its decision soon on whether to table a formal bid for the Indian naval shipbuilder.
“USC is expected to finalize its stance on further participation in the bidding procedure after completing the remote study of the documents provided by the debtor’s trustee and the field review of the RNEL’s assets by USC’s specialists,” it said.
In June 2010, PSL was awarded a ₹26 billion (US$360 million) contract to build five offshore patrol vessels for the Indian Navy. In July 2015, the Pipavav shipyard was chosen for a ‘Make in India’ naval frigate order. The order value exceeds more than USD 3 billion. This order is being termed as the private sector’s biggest-ever warship-building project.
On 13 February 2017, Reliance Defence and Engineering Limited (RDEL) had signed the Master Ship Repair Agreement (MSRA) with the US Navy to maintain the vessels of its Seventh Fleet operating in the region, with the company estimating revenues of about Rs 15,000 crore ($2 billion) over next 3 –5 years.
The Seventh Fleet’s area of responsibility includes the Western Pacific and the Indian Ocean and at any given time there are roughly 140 ships and submarines, 5070 aircraft, and approximately 20,000 sailors under its command. Currently, these vessels visit Singapore or Japan for such works.