The Supreme Court (SC) on Tuesday granted the resolution professional (RP) of Amtek Auto 21 days to invite fresh bids, giving a fresh lease of life to the insolvent component maker whose liquidation it had earlier stayed.
The lenders to the company will have two weeks after that to decide on a final resolution plan and place it before the court, said a three-judge Bench led by Justice Arun Mishra. The next hearing is on November 5.
In its submissions to the apex court, the committee of creditors (CoC) said liquidating the company would benefit no one and instead adversely impact the future of nearly 2,500 employees. Though Liberty House had withdrawn from the process, nearly eight bidders had sent informal expression of interest for the company, Solicitor General Tushar Mehta, appearing for the lenders, told the court on Tuesday.
The CoC had on September 6 approached the apex court with a plea to stop the company’s liquidation after an August 16 judgment of the National Company Law Appellate Tribunal (NCLAT) cleared the sale of the company’s assets. The appellate tribunal also said since there remained no approved resolution plan for the firm despite the passage of the statutory period of 270 days, Amtek Auto must be liquidated.
The SC had, on the plea moved by the Amtek Auto lenders, stayed the firm’s liquidation in the interim.
The New Delhi-based integrated component maker has a debt of Rs 12,603 crore. The liquidation value of its assets was determined at Rs 4,119 crore. The NCLT initiated the corporate insolvency resolution process against the firm on July 24, 2017. On July 25, 2018, the adjudicating authority approved Liberty House’s Rs 4,025-crore resolution plan, which included an upfront payment of Rs 3,225 crore and a fresh infusion of Rs 500 crore for stabilising and improving operations.
However, when the CoC and the RP of Amtek Auto moved applications for the implementation of the resolution plan, Liberty House backtracked, citing “blatant discrepancies in the condition of machinery , valuations, and representations made in the information memorandum and valuation reports”.
Following this, the RP and the CoC had approached the NCLT with a plea to extend the corporate insolvency resolution process period beyond 270 days and sought to restart the bidding process. With Liberty House backtracking, the time available for the insolvency resolution of Amtek Auto had nearly lapsed. After an amendment to the Insolvency and Bankruptcy Code by the government on August 16, however, the total time for ongoing cases which had not been resolved had been extended by 90 days. A related plea by the Insolvency and Bankruptcy Board of India in which it has sought the go-ahead to initiate criminal proceedings against Liberty House Group for failing to go through with its resolution plan for Amtek Auto will also be heard on the next date, the court said.
Source- Business Standard.