State-Run IOC Gets NCLT Nod To Acquire Mercator Petroleum

India’s National Company Law Tribunal (NCLT) cleared state-owned refiner Indian Oil Corporation Ltd.’s (IOC) resolution plan to acquire bankrupt Mercator Petroleum Ltd.

IOC’s resolution plan offers to pay 140.29 crore rupees ($17 million) to the creditors of Mercator Petroleum, a subsidiary of Mercator Ltd., against their admitted claims of 483.58 crore rupees, according to the NCLT’s order dated 2 November.

Total claims against the company, which is engaged in the business of petroleum exploration, development and production in India and abroad, stood at 733.62 crore rupees.

The average of two valuation reports of fair value was 414.60 crore rupees and liquidation value was 310.96 crore rupees, the order showed.

Mercator Petroleum was admitted into the corporate insolvency resolution process (CIRP) on 31 August 2020 following a petition by the company’s operational creditor Halliburton Offshore Services Inc.

The NCLT initially appointed Pinkush Jaiswal as Mercator Petroleum’s interim resolution professional, and later he was confirmed as resolution professional by the company’s committee of creditors. However, the resolution process was delayed due to stay on the CIRP.

In July 2022, the creditors replaced Jaiswal with Satish Kumar Gupta and opened the resolution plans received by the erstwhile resolution professional. The creditors later negotiated the resolution plans with the six prospective resolution applicants (PRAs) and asked them to submit their final resolution plan by 4 February 2023.

The creditors later that month deliberated on the final resolution plans submitted by the PRAs and approved the resolution plan of IOC with a 100% majority.

Later, Gupta filed an application before the NCLT seeking approval for IOC’s resolution plan.

The Mumbai bench of the NCLT observed that the resolution plan meets the requirements of the Insolvency and Bankruptcy Code (IBC) and it is not in contravention of any of the provisions of Section 29A of the IBC and is in accordance with the law.

“The resolution plan submitted by Indian Oil Corporation Ltd. is hereby approved,” Judicial Member Kuldip Kumar Kareer and Technical Member Anuradha Bhatia said in the order.

Separately, IOC said Mercator Petroleum has oil and gas exploration block located in Cambay Basin in Gujarat. The company will implement the resolution plan and complete the regulatory processes, including obtaining necessary approvals, if any, for successful implementation of plan, it added.

(Note: $1 = 83.2120 Indian rupees)

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