The bidding for the port was conducted under the guidelines of the Insolvency and Bankruptcy Code (IBC).
Lenders of Karaikal Port met last week to approve APSEZ’s bid, which will now be taken to the National Company Law Tribunal (NCLT) for final approval, the people said.
APSEZ and Vedanta declined to comment on the matter. The 600-acre port, built under a public-private partnership between the Puducherry government and Chennai-based MARG Limited, has faced financial constraints that have seen the outstanding debt rise to Rs 3,000 crore due to defaults and payment delays.
The Adani Group, which is expanding its port business, sees the southern port located in Pondicherry as a natural fit. Vedanta continued the bidding process because it moves significant quantities of raw materials and finished products for its metals and mining businesses.
APSEZ is India’s largest port operator and owns 12 ports, including Mundra Port, the country’s largest private port. The company recently acquired Gangavaram Port in Andhra Pradesh for ₹6,200 crore. The acquisition of Karaikal Port will be the first such acquisition under IBC.
The port received initial bids from five bidders – JSW Infra, Jindal Power, APSEZ, Vedanta and a consortium of RKG Fund and Sagacious Capital. APSEZ and Vedanta eventually submitted binding financial offers, while the others did not.
The NCLT admitted Karaikal Port for insolvency proceedings on April 29 and appointed Rajesh Sheth as a turnaround professional to manage the company till the debt resolution is finalised.
A group of 11 lenders, all of whom are public sector banks or financial institutions, had initially sanctioned a Rs 1,362 crore loan to Karaikal Port. The loan grew to its current size as interest and penalties were added after irregular payments.
The original lenders were Indian Bank, Allahabad Bank, PNB, United Bank (later merged into PNB), Oriental Bank (later merged into PNB), Syndicate Bank (later merged into Canara Bank), Central Bank, Indian Overseas Bank, IIFC, State Bank of Hyderabad (later merged into State Bank of India) and Corporation Bank (later merged into Union Bank of India). Nine of the 11 lenders, except State Bank of Hyderabad and Corporation Bank, sold their loans to Edelweiss Asset Reconstruction Company in 2015.