New Delhi: The Indian Navy has encashed bank guarantees given by Anil Ambani-owned Reliance Naval Engineering (RNEL), which has an order to supply five offshore patrol vessels (OPVs), Admiral Sunil Lanba said on Monday.Addressing the annual Navy Day press conference, Lanba was responding to a question on whether action had been taken against Reliance Naval for the late delivery of the OPVs.“There is no preferential treatment being given to RNEL. Its bank guarantees have been encashed by the Navy, so punitive action has been taken against RNEL,” said Admiral Lanba.Bank guarantees are generally encashed or invoked for a wide variety of reasons including but not limited to performance slumps, delays and cancellation of an order.Also read: Is Reliance Naval Engineering Sinking?The navy chief, however, added that the deal had not been cancelled “at the moment” and that the contract was being “examined” for what steps could be taken next.The Wire contacted a Reliance Naval spokesperson with questions on why the bank guarantee had been cashed and this story will be updated if and when a response is received.The Rs 2,500-crore patrol boat order, which is part of the Indian Navy’s ‘P-21’ project, is a deal that that the Anil Ambani-firm inherited from its acquisition of Pipvav Defence in 2016. It was Pipavav that bagged the contract in 2011, with the first OPV supposed to have been delivered by 2015.Also read: Indian Govt Suggested Reliance as Partner in Rafale Deal, Hollande Tells French WebsiteIn July 2017, after technical delays, the first two OPVs were handed over and launched from Reliance Naval’s shipyard in Pipavav Gujarat. It is unclear when the company plans on handing over the other three patrol vessels. Financial troubles trip up firm, Navy’s acquisition processOver the last few financial quarters, Reliance Naval’s financial strength has been called into question. In April 2018, the company’s independent auditors questioned the Anil Ambani-led firm’s ability to “continue as a going concern”, after the company posted a loss of Rs 409 crore for the fourth quarter of FY’18. In the quarter ended September 2018, it reported a net loss of Rs 363.13 crore as against a net loss of Rs 150.67 crore during the previous quarter ended September 2017.Also read: IDBI Bank Files Insolvency Case against Anil Ambani’s Reliance NavalIn the last few months, it has had to fend off being classified as a non-performing asset at a few private and public sector banks and being dragged to the bankruptcy courts by lenders such as IDBI Bank. Navy chief Lanba pointed out in the press conference on Monday that RNEL was currently undergoing the corporate debt restructuring process.The Anil Ambani-led company’s financial picture has also thrown a wrench in Indian Navy’s warship building projects. Defence analyst Ajai Shukla wrote in September 2018 that projects worth at least Rs 630 billion have ground to a standstill as the defence ministry and the government are yet to take a call on whether Reliance Naval will be excluded in future contracts.Disclaimer: Anil Ambani’s Reliance Infrastructure has sued The Wire for Rs 6,000 crore in an Ahmedabad city court over our coverage of the Rafale deal.