Mumbai, Sep 2 (IANS): The lenders of Reliance Naval and Engineering Ltd. (RNEL) are staring at a haircut of around 95 per cent, as all the three bidders have submitted exorbitantly low bids for the company.

At a Committee of Creditors (COC) meeting held Wednesday, all the three bids were valued by the two independent valuers and presented to the COC. The independent valuers have found all the bids legally complaint with the NCLT norms.

Three companies i.e. Hazel Mercantile of Veritas Group, JSPL of Naveen Jindal Group, and a consortium of GMS -Dubai and Besiktas Shipyard - Turkey have submitted bids for Reliance Naval.

According to the banking sources privy to the development, the value of Hazel Mercantile's bid is Rs 730 crore, while JSPL has submitted a bid of around Rs 340 crore.

The third bidder, GMS of Dubai along with its Turkish partner, Besiktas Shipyard, has offered an up-front cash of Rs 50 crore.

The total admitted debt of Reliance Naval is Rs 12,000 crore. Therefore, the highest bid of Rs 730 crore by Hazel Mercantile will ensure only around 6 per cent recovery for the lenders.

All the bids are even far below the liquidation value and fair value of Reliance Naval.

According to sources, the lenders have fixed the liquidation value at Rs 1,800 crore, and fair value at Rs 2,500 crore.

IDBI is the lead banker of Reliance Naval.

Since all the three bidders have been found legally compliant, the COC will now appoint an independent consultant to start the commercial negotiations with all the three bidders.

The entire debt of R-Naval has been transferred to National Asset Reconstruction Company (NARCL). The resolution of R-Naval debt will take place through NARCL AMC. The lenders of Reliance Naval have already provided for 100 per cent of the debt in their books, for the last eight years.