Two weeks after staying the liquidation of Amtek Auto Ltd, India's top court has allowed lenders of the automobile component maker to invite fresh bids for its acquisition.
Drawing on the Essar Steel case, the Supreme Court said that one more effort should be made to resolve the debt of Amtek Auto.
Amtek Auto has a debt of around Rs 12,800 crore and its liquidation value stands at Rs 4,129 crore. The company is part of the first list of 12 corporate defaulters that the Reserve Bank of India referred for resolution under the Insolvency and Bankruptcy Code (IBC). It has been in the insolvency resolution process since July 24, 2017.
The apex court has given the committee of creditors 21 days to seek bids and the resolution professional two weeks from then to choose the winning bidder. The final decision should be presented before the court in the next hearing on November 5.
The lenders informed the court that as many as nine parties were interested in buying Amtek Auto.
The company was headed for liquidation following a judgment by the National Company Law Appellate Tribunal (NCLAT) on August 16 as the successful bidder had backed out.
Early this month, the apex court had stayed the order to liquidate the auto components maker on a plea by its lenders led by Corporation Bank.
In July last year, the Chandigarh bench of the National Company Law Tribunal (NCLT) had approved UK-based Liberty House's Rs 4,025 crore resolution plan. This included an upfront payment of Rs 3,225 crore and a fresh infusion of Rs 500 crore for stabilising and improving operations.
Liberty House, led by Indian-origin businessman Sanjeev Gupta, later failed to furnish the performance guarantee and make the necessary upfront payments to implement the resolution plan. It cited irregularities in the information memorandum submitted by the resolution professional.
Lenders have sued Liberty House and want the firm banned from any resolutions under the IBC.