REG - Mercantile Ports&Log - Update - Full Debt Redemption and Legal Action

Mercantile Ports & LogisticsAnnouncement

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RNS Number : 7147Z  Mercantile Ports & Logistics Ltd  09 April 2026

 

Mercantile Ports & Logistics Limited

 

("MPL" or the "Company")

 

Update - MPL Pursues Full Debt Redemption and Intensifies Legal Action to
Recover Karanja Asset

 

 

Mercantile Ports & Logistics Limited (AIM: MPL), which is operating and
continuing to develop our port and logistics facility in Navi Mumbai,
Maharashtra, India, confirms that it continues to actively pursue all
available legal remedies to regain control of its wholly owned asset, Karanja
Terminal & Logistics Pvt. Ltd. ("KTPL").

 

As previously announced, the Company had reached agreement for a one-time
settlement with the consortium of banks which at the time held the Company's
debt. Despite the Company following due process, this settlement was
arbitrarily annulled as one of the banks did not sanction it. The Company
therefore commenced legal proceedings to protect its asset.

 

Since that time, the Company has formally offered to redeem 100 per cent of
its outstanding debt before the Supreme Court of India, demonstrating its
unequivocal commitment to honour all financial obligations and protect
stakeholder value. The Supreme Court has directed the Committee of Creditors
("CoC"), led by Prudent ARC Ltd, which now holds the Company's debt, to
consider the Company's proposal under Section 12A of the Insolvency and
Bankruptcy Code. This was filed pursuant to the National Company Law Appellate
Tribunal's Order. Despite the passage of a significant period of time, the CoC
is yet to consider or take any action to implement the proposal. The process
has not progressed in a manner consistent with the timeline, or the intent, of
Section 12A.

 

The Company also notes that two separate resolution plans have been submitted,
by third parties, to the CoC to acquire the asset through the insolvency
process. MPL believes these developments further underscore its long-standing
concerns that the process appears to have been conducted in a manner intended
to transfer the asset away from the Company and its international
shareholders. The Company further notes that the CoC is considering
third-party resolution plans, notwithstanding the availability of MPL's
proposal which provides for full repayment of amounts due to financial
creditors. MPL believes that this raises important questions in relation to
the processes' integrity, transparency, and the treatment of international
investor capital.

 

On 6 April 2026, MPL approached the National Company Law Tribunal, Mumbai,
seeking expeditious disposal of the Company's proposal under Section 12A. The
Court has directed the CoC to convene a meeting with the Company to consider
the proposal, which sets out the repayment of the full amount due to the
Company's financial creditors. The Bench duly noted that despite pending
proposal of the Company, the CoC is proceeding to vote on resolution plans.
Accordingly, the Court has opined that the consideration of the Company's
proposal should be done with due exercise of commercial wisdom of the CoC and
not merely as an empty formality.  The meeting in this regard has been set
for Friday 10 April 2026 in New Delhi and the Company expects to update
shareholders and stakeholders after the meeting.

 

Importantly, MPL has executed an agreement with a leading international oil
and gas company,  amongst others, which has committed to invest a significant
part of the amount required to redeem the outstanding debt in full, as well as
offering funds for the future development of the project. In parallel, the
Company has received strong support from investors both in the UK and
internationally to participate in a full refinancing of the debt in order to
restore the asset to MPL ownership and future business operations.

 

Over the past 15 years, MPL has deployed approximately £160 million of
predominantly international equity capital into the development and operation
of the Karanja facility, navigating prolonged regulatory delays and
infrastructure challenges. The Company has also serviced interest obligations
broadly equal to the principal amount disbursed, despite delayed revenue
generation caused by factors beyond the Company's control.

 

MPL reiterates that KTPL has never been operationally insolvent and remains
revenue generating. MPL believes its proposal represents a clear and direct
route to full recovery for financial creditors and maintains that the current
situation reflects a failure of the process rather than any underlying
financial incapacity.

 

 

Pavan Bakhshi, Managing Director of MPL, commented:

 

"We continue to be proud of the support we received from international
investors to fund MPL on the London Stock Exchange and to build key
infrastructure in India.

 

We have presented a comprehensive and credible proposal to fully redeem the
debt and repay all outstanding financial creditors. It is difficult to
understand why the proposal has not been considered and implemented in a
timely manner. We will continue to fight to retain our asset, restore it to
operational success and protect stakeholders' interests. Anything other than
this would be a travesty.

 

We remain confident of a positive outcome and look forward to providing a
further update soon."

 

 

 

 

For further information, please visit www.mercpl.com
(https://www.mercpl.com/)  or contact:

 

 MPL                                c/o Cavendish

                                    +44 (0) 207 220 0500
 Cavendish Capital Markets Limited  Stephen Keys

 (Nomad and Broker)                 +44 (0) 207 220 0500

 

The information contained within this announcement is deemed by the Company to
constitute inside information as stipulated under the Market Abuse Regulation
("MAR") EU no.596/2014. Upon the publication of this announcement via
Regulatory Information Service ("RIS"), this inside information is now
considered to be in the public domain.

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