RInfra Joint Venture Mumbai Metro One Stares At Insolvency

Mumbai Metro One Private Ltd., a joint venture between Reliance Infrastructure Ltd. (RInfra) and Mumbai Metropolitan Regional Development Authority (MMRDA), is staring at the insolvency proceedings.

State Bank of India (SBI) has filed an insolvency petition against Mumbai Metro One, which runs the metro line from Versova to Ghatkopar in India’s financial capital Mumbai, RInfra said in a stock exchange announcement.

SBI, the state-run lender, filed the insolvency petition before the Mumbai bench of the National Company Law Tribunal (NCLT) for recovery of about 416.08 crore rupees ($50.37 million).

RInfra said Mumbai Metro One is seeking legal advice and will take all appropriate steps to protect its interest in the matter.

The financial implication on the company cannot be ascertained and is contingent upon the final outcome of the proceedings and subsequent legal challenges, it noted.

RInfra owns a 74% stake in the metro line operator, while the remainder is held by MMRDA, an apex body for planning and co-ordination of development activities in Mumbai and its surrounding areas, according to Mumbai Metro One’s website.

The Versova-Andheri-Ghatkopar corridor, a mass rapid transit system project, was awarded by MMRDA through a global competitive bidding process on public-private-partnership framework to RInfra-led consortium in 2007. Later, a special purpose vehicle, namely, Mumbai Metro One, was incorporated for the implementation of the project.

This was the first metro project in the country financed by Indian banks, according to Mumbai Metro One’s website. The project was financed by a consortium of banks, led by Syndicate Bank, Indian Bank, State Bank of Hyderabad, Bank of Maharashtra, IDBI Bank and India Infrastructure Finance Company (UK), it said.

(Note: $1 = 82.5996 Indian rupees)

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