NEW DELHI: Anil Ambani-led Reliance Infrastructure (RInfra) on Monday slapped a mammoth Rs 5,440.38 crore arbitration claim against the founder promoters of Pipavav Defence and Engineering for alleged “breach of warranties”.
According to RInfra’s statement, the breach of warranties relate to a purchase agreement between the two firms dated March 4, 2015, the same month during which RInfra had announced the acquisition of a controlling stake in Pipavav Defence and Offshore Engineering for up to Rs 2,082.3 crore.Reliance Infrastructure Ltd (RInfra), its subsidiary Reliance Defence Systems (RDSPL) and the founder promoters of Pipapav Defence and Engineering Ltd — which has been renamed Reliance Naval and Engineering Ltd (RNEL) — had on March 4, 2015, entered into an agreement for acquisition of shares of Pipapav Defence and Engineering.
However, a Press Trust of India (PTI) report states RInfra had discovered that there had been serious breaches of warranties and representations made by the founder promoters, and as per the share purchase agreement, the company is entitled to claim the loss caused. RInfra puts aggregate claims at Rs 5,440.38 crore.“The company, along with its subsidiary, RDSPL has issued an arbitration notice against Nikhil Gandhi, Bhavesh Gandhi and their companies, i.e. SKIL Infrastructure Ltd, Grevek Investments and Finance Pvt Ltd and SKIL Shipyard Holdings Pvt Ltd, all being the founder promoters of Pipapav Defence and Engineering Ltd... asserting the claims for breach of warranties under the purchase agreement dated March 4, 2015,” Reliance Infrastructure said in a regulatory filing to BSE.
“The company is convinced of the breaches discovered and is, therefore, compelled to enforce its rights,” PTI reported sources as saying, adding that the arbitration would have “no impact on the execution of existing order and upcoming financial liabilities of the company”.RInfra’s arm Reliance Defence Systems Private Ltd had in 2015, initially bought around an 18 per cent stake in Pipavav Defence and Engineering Ltd to enter the defence sector.
RInfra had acquired another 18 per cent stake in Pipavav Defence for Rs 819 crore, along with an open offer for 26 per cent of shares at Rs 66 per share, for a total of about Rs 2,080 crore.Reliance Naval and Engineering Limited (RNAVAL) formerly Reliance Defence and Engineering Limited / Pipavav Defence and Offshore Engineering Company Limited is the first private sector company in the country to obtain the licence and contract to build warships.Currently, it operates India’s largest integrated shipbuilding facility, which houses the only modular shipbuilding facility with a capacity to build fully fabricated and outfitted blocks.
