Welspun Corp. Limited (BSE:532144) has emerged as the winning bidder of the shipyard of distressed borrower ABG Shipyard Limited at an auction for a consideration of INR 6.59 billion. Welspun Corp.

and its subsidiary Nauyaan Shipyard Private Limited would acquire the ABG asset at Dahej, in Gujarat. The asset is spread over 165 acres of leasehold land with 1,000 m of water frontage. Once owned by Rishi Agarwal, ABG Shipyard is undergoing liquidation after lenders failed to find a buyer under insolvency proceedings.

It is among the 12 initial companies the Reserve Bank of India (RBI) had directed lenders to refer to the bankruptcy court for resolution. In an order dated August 26, the Supreme Court directed the liquidator of ABG Shipyard to conclude the sale of specific assets of the company within four weeks from the date of the order. Welspun and its subsidiary, which emerged as the successful bidder, paid INR 6.59 billion purchase consideration on September 21, a notice to the stock exchanges said.

Welspun has proposed using ABG Shipyard's facilities for defence and commercial shipbuilding, green steel, ship breaking and ship repair, among others. In a separate statement to the media, the Enforcement Directorate (ED) said it had attached shipyards, agricultural land, commercial properties, and bank deposits worth INR 27.47 billion. The assets are attached following allegations of bank loan fraud that are under investigation.

The attachment notice was issued to the liquidator soon after he issued a sale certificate for transferring the specific assets to winning bidders. In a statement to the exchange, Welspun said it "proposes to take appropriate action in light of the above, including the immunity available to the specified assets sold under liquidation." It further said that the attachment notice is issued even as provisions of the Insolvency and Bankruptcy Code bar investigative agencies from attaching or confiscating properties of corporate debtors sold as part of liquidation assets.