MUMBAI (Metro Rail News): Mumbai Metro One Private Limited (MMOPL) entered a debt reconstruction agreement with National Asset Reconstruction Company Limited (NARCL). This agreement reduced the company’s debt by ₹1,100 Crore and provided relief to the company on the insolvency proceeding that is looming over the company for the last few years.
The company’s outstanding debt of ₹2,771.32 Crore has been reconstructed under this agreement. After the reconstruction, this amount has been revised to approximately ₹1,600 Crore that the company will repay to NARCL.
Now, NARCL will take over the debt from all the lenders including SBI, IDBI Bank, Indian Bank and Canara Bank, and MMOPL will have to repay the said amount to NARCL. Further, the NARCL will appoint a director to the board of MMOPL. A monitoring committee, with members from both parties, has been formed to oversee the reconstruction.
MMOPL is a collaborative venture of Reliance Infrastructure and Mumbai Metropolitan Region Development Authority (MMRDA). It operates the Line 1 (Blue Line) of the Mumbai Metro. The line has a daily ridership of around five lakh commuters.
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Company’s long loan repayment defaults
MMOPL has been defaulting the repayments of loans from 2018, after which it was declared as a Non-Performing Assets (NPA). During the construction stage of Line 1, the estimated budget of ₹2,356 Crore increased to over ₹4,000 Crore.
SBI and IDBI Bank, who were among the lending institutes for the project, proceeded to the National Company Law Tribunal (NCLT) for insolvency. However, the Maharashtra government offered to settle the dispute and buy Reliance’s stakes in the project. But, the settlement offer could not go through.
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