Liberty House in talks with banks over revised Amtek Auto bid
Mumbai: UK-based Liberty House Group is in talks with the lenders of Amtek Auto Ltd to submit a revised bid for the troubled auto component maker after its previous bid was rejected by a panel of lenders supervising Amtek’s bankruptcy proceedings, two people close to the development said.
Lenders rejected the only two bids received from Liberty House and Deccan Value Investors, on the grounds that they quoted less than Amtek’s liquidation value, according to the people mentioned above, who spoke on condition of anonymity. Amtek Auto is currently undergoing resolution under the insolvency and bankruptcy code (IBC).
“They (Liberty House) are negotiating with the lenders and are also willing to restructure the deal to find a middle path. The valuation is also being reconsidered,” the first of the two people cited above said.
A Liberty House spokesperson said the firm is “engaged in the process and working towards an amicable solution.”
Banks are willing to accept fresh bids from Liberty House, Deccan Value and other eligible applicants, though they do not want to start the whole bidding process due to time constraints, the second person cited earlier said. A decision is likely in the next two weeks, he said. A spokesperson for Corporation Bank, which leads the committee of creditors, did not respond to calls and messages.
Corporation Bank had initiated insolvency proceedings against Amtek Auto in the Chandigarh National Company Law Tribunal in July 2017. Under IBC, a distressed account needs to be resolved within a timeline not exceeding 270 days. Amtek’s lenders have already sought a 90-day extension as the 180-day deadline lapsed on 20 January.
Amtek has a total of Rs12,586 crore claims admitted against it according to the data given by the Insolvency and Bankruptcy Board of India. Separately, SBI initiated insolvency proceedings against Amtek Auto’s subsidiary Castex Technologies Ltd in October 2017. Castex features in the second list of 28 stressed accounts issued by the RBI to the banks for resolution. At the end of March 2017, Castex had a total debt of Rs6,285 crore whereas the two other units of Amtek—Metalyst Forgings Ltd and Amtek Ring Gears Ltd had debts of Rs3,473 crore and Rs2,000 crore respectively.
With consolidated assets worth Rs26,080 crore, the Amtek Group has operations across forging, iron and aluminium casting, machining and sub-assemblies.