REG - Mercantile Ports&Log - Update re Karanja Asset

Mercantile Ports & LogisticsAnnouncement

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RNS Number : 3053B  Mercantile Ports & Logistics Ltd  21 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), 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, a Committee of Creditors ("CoC") meeting was held on
Friday 10 April 2026, as directed by the NCLT. The meeting was attended by Mr.
Pavan Bakhshi in person along with legal counsel in New Delhi and financial
advisors from London. Mr Bakhshi reiterated that the Company is ready, willing
and able to fulfil the terms of its 12 A Proposal and gave further assurance
and clarification that the Company remains committed to redeem the debt of the
Company in full and ensure that there is no loss to creditors. The Company
demonstrated its ability to redeem the debt and submitted documents to support
this. The Company believes that, alongside its advisers, it addressed all
questions fully.

 

On 13 April 2026, the Company received what it considers to be a biased and
inaccurate set of minutes of the CoC meeting held on 10 April 2026, which was
surprising given that the meeting had been recorded. The Company also received
notice convening a further CoC meeting to take place on 14 April 2026 for
discussion on the 12 A proposal. The Company duly objected to the inaccurate
recording of the minutes of the CoC meeting held on 10 April 2026 and stated
that no further meeting should be held until the record is set straight, as
the inaccurate minutes would have a direct bearing on the discussion of the 12
A proposal. In addition, the Company was suspicious of the purpose of a
further CoC meeting being proposed to be held on a public holiday and objected
to this, especially as the Company's Application was listed for hearing before
the Hon'ble NCLT the very next day.

 

Despite the objections raised by the Company, a further CoC meeting was held
on 14 April 2026. The CoC took note of the objections raised by the Company in
relation to inaccurate, biased recording of minutes of the meeting of 10(th)
April but proceeded to vote on the 12 A proposal and rejected the Company's
proposal unanimously.

 

During the course of the hearing before NCLT, Mumbai on 15 April 2026, counsel
for the Company informed the court about the arbitrary and mechanical
rejection of the 12 A Proposal. The Company was shocked that, not only was the
Company's 12 A proposal rejected but the CoC, with utter disregard to due
process, had approved a resolution plan received from Adani Ports and Special
Economic Zone Limited, which the Company believes was improper as the matter
was sub-judice and pending before the court.

 

The Company believes that the sequence of events clearly reveals that the
entire process has been stage managed for many months. The Company believes
that the annulment of the One Time Settlement agreed with Company's lenders
was unlawful, and that the transfer of debt and the CIRP process was
orchestrated with a view to remove the valuable asset from the Company and
hand it over to a pre-determined buyer.

 

MPL reiterates that KTPL has never been operationally insolvent and remains
revenue generating. The Company had recently entered into its largest contract
since inception with a state-owned oil & gas enterprise and had commenced
generating revenue under that agreement. In addition, it had strong forward
visibility on a pipeline of contracts that had been expected to be concluded
during the course of the year, furthering the Company's momentum. The Company
continues to have the support of its stakeholders and, indeed, now has the
support of an international oil & gas company.  MPL believes that its
proposal represents a clear and direct route to full recovery for all
creditors and maintains that the current situation reflects a total failure
and abuse of the process rather than any underlying financial incapacity of
MPL. MPL remains committed to continue to challenge what it considers to be
the grossly arbitrary actions of the CoC designed to deprive the Company of
its asset. As stakeholders would expect, MPL has instructed its advisers to
lodge an appeal in the courts and will continue to use all legal means
available to it to secure its asset.

 

 

Pavan Bakhshi, Managing Director of MPL, commented:

 

This outcome is nothing short of brazen. What we have witnessed is a process
that appears to have been deliberately manoeuvred from the outset to strip MPL
of an asset it conceived, funded and built over more than a decade. We took
the early-stage risks when no one else would, deployed substantial
international capital, and created a strategically important port and
logistics platform - only to now face what we believe to be a coordinated and
malicious attempt to take it away.

What is particularly striking is the speed with which this outcome was forced
once we demonstrated our financial capability. We submitted our proposal on 6
February 2026 - nearly seven weeks before resolution bids were even received -
yet the CoC took no meaningful steps to consider or conclude on it during that
period. However, the moment we exerted pressure for them to consider our
proposal to redeem the debt in full, it was immediately rejected. We know that
we have created a valuable asset and the actions of others to try to take it
from us only underlines this further.

We believe that this process fundamentally undermines India as an investment
destination and sends a deeply concerning signal to global investors.

We will not accept this outcome. We have fought to protect this asset for our
stakeholders - and we will continue to pursue every legal avenue available to
ensure that justice prevails and that this asset is not wrongfully taken.

 

 

Stefan Passantino, Board Member of MPL, commented:

What is particularly concerning from an international perspective is the
apparent disregard for due process and the suspicious and opaque manner in
which a fully funded redemption proposal was set aside.

If investors can commit substantial capital, take development risk, and
successfully build and operate critical infrastructure, only to see that asset
transferred through a process that appears neither fair nor transparent -
potentially into the hands of far larger domestic interests - it raises
serious questions about the protection of foreign investment.

At its core, this creates a chilling effect; it calls into question whether
there is any meaningful incentive to invest long-term capital if, after the
risks have been navigated and value has been created, the asset can be taken
through a process that does not prioritise fairness or full value recovery.

 

Jeremy Warner Allen, Chairman of MPL, commented:

 

We will also continue to raise our concerns with the UK, US and Indian
governments on how investors from their respective countries are being
cheated.  This matter arises at a time of deepening economic cooperation
between India and the UK, underscored by the recently concluded UK-India Free
Trade Agreement, which is intended to promote investor confidence and
transparency. Against this backdrop, the treatment of this asset risks being
seen as fundamentally inconsistent with those principles. We believe that it
is important that this situation is addressed decisively, so that it does not
undermine the credibility of that framework or signal that a strategically
developed, internationally funded asset can become a casualty, even as both
nations publicly champion stronger bilateral investment ties.

We continue to believe that what we have created in Karanja can be a positive
example of UK and International investors working to build a strategic
infrastructure asset in India, which is a success for all parties.

We remain fully supportive of management in pursuing all appropriate steps to
protect the Company's interests.

 

 

 

 

 

 

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

 

This announcement contains inside information.

 

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