A Mumbai bankruptcy court has approved a debt resolution plan given by Bharat PetroResources Ltd, a subsidiary of Bharat Petroleum Corp (BPCL) to take over Videocon Oil Ventures, upholding Bharat Petro’s right to first refusal as a shareholder in their Brazilian joint venture.
The two-judge bench of the National Company Law Tribunal (NCLT) dismissed one resolution applicant Petro Rio’s challenge to the committee of creditors’ (CoC) decision that allowed Bharat Petro to exercise its right to first refusal (RoFR).
It noted that the applicant had bid being fully aware of the first refusal rights – and their commercial implications.
“The argument raised…that RoFR acts against there being a level playing field is equally fallacious. Being fully aware of the RoFR available to Bharat Petro and its implications, Petro Rio submitted an offer for a commercial value that it believed would dissuade Bharat Petro from exercising its ROFR….There is no question on Bharat Petro’s ROFR having an impact on the playing field between parties,” the court said.
A year ago, Bharat Petro had consented to match Eneva and Petro Rio’s offers, for Potiguar Basin, Sergipe Basin and Campos Basin to PetroRio for $200 million to lenders as upfront payment. The resolution professional had admitted claims of Rs 30,640 crore from financial creditors.
Bharat Petro’s offer means a recovery of less than 10% for creditors.
The BPCL’s subsidiary’s offer received 99.96% votes in favour. The assets of VoVL — mainly the oil exploration blocks — are in Brazil while the sale process was conducted in India.
BPCL’s subsidiary, BPRL Ventures BV, had created a 50:50 joint venture with Videocon’s subsidiary Videocon Energy Brazil for oil and gas exploration in the South American country.
As a JV partner, BPCL has the first right to match any offer that lenders receive for VoVL oil basins as per the contractual arrangements governed by Brazilian law.
Source: Economic Times