Essar Shipping sails away from bankruptcy after settling up with L&T Finance
Essar Shipping, the group’s second firm to fall into bankruptcy, has exited insolvency after settling up with creditor L&T Finance.
In early March, VCCircle reported that L&T Finance had pushed Essar Group firm into bankruptcy over a default of Rs 69 crore ($9.5 million) after its step-down subsidiary Essar Oilfields Services (now OGD Services) failed to repay the loan made in 2014. It had filed for proceedings in January 2020.
To stave off proceedings, Essar Shipping had moved the appeals tribunal which had stayed the formation of the committee of creditors in an order dated March 10.
This is not the first time that Essar Shipping had been dragged to the bankruptcy tribunal. In December 2018, government-owned lender Punjab National Bank had filed for proceedings against the Essar group firm, which was the corporate guarantor for OGD Services, over a default of Rs 253.5 crore.
Another group firm Essar Steel had entered insolvency in 2017. After two years of legal battle that tested India’s bankruptcy law, the apex court gave ArcelorMittal the go-ahead to buy Essar Steel.
Part of Ruia family’s Essar Group, Essar Shipping was established in 1977 as a logistics solution provider with a presence in sea transportation, logistics and oilfield services.
Based in Jamnagar, Gujarat, the company also provides contract drilling services to oil and gas firms.
Founded in 2006 in Mumbai, OGD Services is engaged in providing refinery and oilfield services. It owns and operates a fleet of 15 land rigs.
Essar Shipping was 74.37% promoter-owned as on December-end.