Authorities said National Asset Reconstruction Company Ltd (NARCL), a bad loan aggregator supported by the Centre, has proposed to buy out Mumbai Metro One Private Limited (MMOPL), which runs the Versova-Andheri-Ghatkopar metro, in a significant relief.
State Bank of India, IDBI Bank, Canara Bank, Indian Bank, and Bank of Maharashtra are the five public banks to which MMOPL, a 74:26 joint venture between Anil Ambani’s Reliance Infrastructure and the Maharashtra government-backed Mumbai Metropolitan Region Development Authority (MMRDA), owes money.
NARCL has been assigned MMOPL’s outstanding loans. This will help to reform the company’s financial structure and offer MMOPL some breathing room. Additionally, this could improve metro operations,” a government official who asked to remain anonymous added.
According to officials, the banks who provided loans to MMOPL have been granted cash and security receipts by the NARCL. Following the state government’s withdrawal earlier this year, the decision may also bring the MMRDA’s proposed acquisition of MMOPL back to life.
Mumbai The nation’s first metro project granted through a public-private partnership was Metro 1. A vital east-west link in the city, the 11-kilometer metro line runs through packed residential and business districts. Every day, between 450,000 and 500,000 individuals use Metro 1. Because of the rush, commuters have been calling for an increase in coaches per rake from four to six.
In order to recoup loans of several hundred crores, the banks who provided MMOPL with loans petitioned the National Company Law Tribunal in 2023 to declare the business insolvent. After the company and its lenders reached a one-time debt settlement arrangement, the NCLT ended the insolvency proceedings in April of this year.
Following the recommendation of an independent committee led by former state chief secretary Johny Joseph, the resolution cleared the path for the Maharashtra government to acquire Reliance Infrastructure’s stake. The proposal to buy Reliance Infrastructure’s 74% interest in MMOPL for Rs 4,000 crore was even approved by the Maharashtra Cabinet. The state government, however, changed its mind in June 2024, claiming that there was insufficient funding.
The metro operator would receive some relief as a result of the NARCL’s decision to assume MMOPL’s bad debts. Since at least 2020, Reliance Infrastructure has sought to leave the metro project, but any takeover has been delayed due to disputes over values.
In 2021, the Centre established NARCL to compile non-performing assets, or loans that are past due by more than ninety days, from the banking sector. The majority of NARCL is owned by public sector banks, with the remaining portion being held by private lenders.
Source: Hindustan Times
