Mercantile Ports intensifies efforts to regain control of Karanja terminal

9th Apr 2026 13:30

(Sharecast News) - Mercantile Ports & Logistics said in an update on Thursday that it was intensifying legal efforts to regain control of its Karanja terminal asset in India, while pursuing a proposal to fully repay its outstanding debt.

The AIM-traded company said it had offered to redeem 100% of its debt before the Supreme Court of India, following the collapse of a previously-agreed one-time settlement with its former lending consortium after one bank failed to approve the deal.

It said it had since initiated legal proceedings to protect its wholly owned subsidiary, Karanja Terminal & Logistics Pvt. Ltd.

The Supreme Court had directed the Committee of Creditors, now led by Prudent ARC, to consider the company's repayment proposal under Section 12A of India's Insolvency and Bankruptcy Code.

Mercantile Ports said, however, that the committee was yet to act on the proposal despite the passage of time, and that the process had not progressed in line with statutory timelines.

The firm added that two third-party resolution plans had been submitted to acquire the asset through the insolvency process, raising concerns that the process could result in the transfer of the asset away from existing shareholders.

Mercantile Ports said it believed the situation raised questions over the transparency and integrity of the process, particularly given its proposal provides for full repayment to creditors.

On 6 April, the company applied to the National Company Law Tribunal in Mumbai to expedite consideration of its proposal.

The tribunal had directed the Committee of Creditors to convene a meeting with the company, scheduled for 10 April in New Delhi, to review the proposal, noting that it should be assessed using the committee's "commercial wisdom" rather than as a formality.

Mercantile Ports said it had secured support from a "leading international oil and gas company" to fund a significant portion of the repayment, alongside additional backing from UK and international investors to refinance the debt and restore ownership of the asset.

The company noted it had invested about £160m of predominantly international equity capital into the Karanja facility over the past 15 years and maintained that the asset remained operational and revenue generating, arguing that the current situation reflected process issues rather than financial incapacity.

"We have presented a comprehensive and credible proposal to fully redeem the debt and repay all outstanding financial creditors," said managing director Pavan Bakhshi.

"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."

At 1521 BST, shares in Mercantile Ports & Logistics were up 106.15% at 0.67p.

Reporting by Josh White for Sharecast.com.

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