Thumbs down for TAG boat sale by Duff & Phelps

Vol 23, PW 5 (16 Jan 20) Exploration & Production

Only two companies submitted bids to liquidator Duff & Phelps in an auction to sell 18 offshore vessels belonging to financially-distressed TAG Offshore amid accusations the sale was "set up to fail."

On January 10, the US-headquartered liquidator appointed by the National Company Law Tribunal (NCLT) received bids for just seven vessels from two companies: Ocean Sparkle and little-known and mysterious newcomer Premier Jet. Despite the fact that 17 companies were declared eligible to bid, of the 19 that expressed interest.

However the results of the auction await NCLT's decision, expected on January 27, to a challenge brought by angry companies on January 9 who claim the process was rushed through "possibly to ensure some of these (now) decrepit and abandoned vessels can be offered in ONGC’s 10-vessel tender for which bids are due on January 21," according to an industry source. Under scrutiny is why the Duff & Phelps advertisement for the tender failed to mention a reserve or starting price for each vessel in the auction.

Instead this was communicated by email to each eligible bidder on January 7 - three days before the auction - with a request that bidders deposit 10% of the reserve price as a security deposit for each vessel. Information about liabilities was initially only available for a non-refundable fee of Rs5 lakhs ($706,000) but even access to this crucial information was "withdrawn without explanation."