Back from brink, Amtek faces debt resolution process again as SC orders fresh bids
Advertisement

Back from brink, Amtek faces debt resolution process again as SC orders fresh bids

By Beena Parmar

  • 25 Sep 2019
Back from brink, Amtek faces debt resolution process again as SC orders fresh bids
Credit: 123RF.com

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.

Advertisement

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.

Advertisement

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.

Advertisement

Lenders have sued Liberty House and want the firm banned from any resolutions under the IBC.

Share article on

Advertisement
Advertisement
Google News Icon

Google News

Follow VCCircle on Google News for the latest updates on Business and Startup News