The lenders of debt-laden ABG Shipyard on Thursday rejected a proposal by Liberty House to 51 percent equity of the company, said sources familiar with the matter.
London-based metals group Liberty House had offered to repay lenders Rs 5,600 crore over 10 years but 98 percent lenders rejected the offer, sources told CNBC-TV18, requesting anonymity.
"Committee of Creditors (CoC) almost unanimously rejected the proposal by Liberty House," they said, adding that the lenders are not in favour of re-bidding and the company may head into liquidation.
In April, The Hindu BusinessLine reported that Liberty House has emerged the sole bidder in a third round of bidding for ABG Shipyard.
Earlier this year, seeking to recover their loans worth about Rs 17,000 crore, lenders of ABG Shipyard have put the company on the block.
ABG Shipyard is among the list of 12 large companies that the RBI had identified in June 2017 for banks to refer to the bankruptcy court immediately.
The consortium of about two dozen banks, led by ICICI Bank, has mandated SBI Caps for finding the buyer for their 51 percent equity in ABG Shipyard.
Lenders had acquired the majority stake in the company upon converting part of their debt into equity under strategic debt restructuring (SDR) scheme.
ICICI Bank had acquired the highest 11.08 percent stake in the company in October last year. The consortium of lenders had also restructured their loan in 2013 under corporate debt restructuring (CDR) scheme.
In August last year, the company's board had also approved the SDR invoked by its lenders. The lenders also include SBI, Dena Bank, PNB and IDBI Bank.
Incorporated in 1985, ABG Shipyard is the flagship company of ABG group with interests in shipping and cement sectors and manufactures ships and rigs across two facilities in Gujarat at Dahej and Surat.
It is one of the three private shipyards in India approved by the Indian Navy to build various types of naval vessels and has built 23 vessels for Indian defence sector.
With inputs from PTI.