State Bank of India (SBI) has approached the National Company Law Tribunal (NCLT) against Mumbai Metro One (MMOPL) to admit the company under the Corporate Insolvency Resolution Process (CIRP).
The company is a joint venture between Anil Ambani-promoted Reliance Infrastructure (RInfra) and Mumbai Metropolitan Regional Development Authority (MMRDA).
SBI has filed a petition with NCLT’s Mumbai bench for the recovery of its dues of over Rs 416 crore against the MMOPL, also known as Metro Line 1 in Mumbai city. Other lenders include Canara Bank, IDBI Bank, Indian Bank, Bank of Maharashtra, IDBI Bank and India Infrastructure Finance Company (UK).
“MMOPL is seeking appropriate legal advice and will take all appropriate steps to protect its interest in the aforesaid matter,” said Reliance Infrastructure in its stock exchange filing. “The financial implication on the company cannot be ascertained and is contingent upon the final outcome of the said proceedings and subsequent legal challenges.”
This was the first Metro project awarded in the country on a public-private partnership (PPP) basis and entails the design, financing, construction, operation and maintenance of about 12 km elevated metro operating between Versova to Ghatkopar with 12 stations en-route.
The company has bank loans of Rs.1650 crores and an external commercial facility of $ 63.44 million, according to a rating report by Brickwork dated November 21, 2022. The rating is tagged as a non-cooperative borrower by the rating agency.
As per the company’s website, Reliance Infrastructure owns a 74% stake in the metro line operator, while the remaining 26% stake is held by MMRDA, an apex body for planning and coordinating development activities in Mumbai and its surrounding areas.
“Given the fact that this was the first metro project in the financial capital, it will be interesting to see how this development pans out,” said Munaf Virjee, managing partner of law firm AMR Law. “All the parties including the company, lender and government authorities, will have to expedite any process to reach a logical conclusion in the case since large public interest is involved.”
Multiple media reports suggest that MMRDA is seeking to take over the operation from its majority stakeholder MMOPL.
Originally, the Versova-Andheri-Ghatkopar corridor was awarded by MMRDA through a global competitive bidding process on a public-private partnership framework to the Reliance Infrastructure consortium in 2007. Later, a special purpose vehicle, namely, Mumbai Metro One, was incorporated for the implementation of the project.
