SBI to sell guarantees of Reliance Naval promoter

The transaction also highlights that under the personal guarantee could be minuscule against the claim amount, said a senior official from the industry.

The bank, in a notice on its website, said that it has principal outstanding dues of ₹1,160 crore and total dues of ₹3,512 crore, as of May 31, 2024. The bank stated that it is seeking to assign the residual debt along with the guarantee.

Nikhil Gandhi and his brother have provided personal guarantees while provided corporate guarantees on the loan.

Nikhil Gandhi could not be reached on his email and mobile phone despite repeated attempts by ET.

Anil Ambani's erstwhile company, Reliance Naval, was sold for staggered payment of ₹2,108 crore under the (IBC) last year. had partnered with resolution applicant through its special purpose vehicle - - to acquire Reliance Naval.

Last December, the Supreme Court upheld the constitutional validity of an IBC provision that allows to recover overdue money from personal guarantors of corporate debtors.

Effectively lenders can invoke the provisions of the Act if they fail to recover the entire debt even after selling the company under IBC. The lender can invoke the provision provided the promoter of the defaulting company has provided a personal guarantee against the loan.

In the case of Reliance Naval, the resolution professional had admitted ₹12,429 crore claims from financial creditors and lenders' recovery was about 17%.

This gave lenders the right to recover the residual debt by invoking the provisions of personal insolvency. The residual debt is the difference between the claim and recovery from the sale of the company under IBC.

SBI has invited expressions of interest by May 31 and scheduled an on June 25.