Amtek Auto bankruptcy case admitted by NCLT Chandigarh bench
Mumbai: A National Company Law Tribunal (NCLT) bench in Chandigarh admitted State Bank of India’s (SBI) petition for bankruptcy proceedings against Amtek Auto Ltd on Monday, said a lawyer aware of the matter, requesting anonymity as he isn’t authorized to talk to reporters.
Auto parts maker Amtek Auto is one of the 12 firms identified by the Reserve Bank of India (RBI) for early bankruptcy proceedings. The firm didn’t respond to messages seeking comment. Amtek is the fifth firm among the 12 whose bankruptcy petition has been admitted by NCLT after Jyoti Structures, Alok Industries, Monnet Ispat and Energy Ltd and Electrosteel Steels Ltd.
The firm did not object to the admission and requested the court to also consider its resolution plan, said the lawyer mentioned above. NCLT also approved the appointment of Dinkar Venkatasubramanian, a partner at EY, as the interim resolution professional (IRP).
Since the firm defaulted on bond repayments of close to Rs800 crore in September 2015, Amtek has been trying to sell various group businesses to reduce the debt on its books. In February, its lenders are understood to have asked it to either repay loans or convert the outstanding into equity shares or warrants. The firm owes at least Rs8,066 crore to various lenders.
ALSO READ: Banks to blame for Amtek Auto’s bloated debt
Its unit, Amtek Global Technologies Pte Ltd, agreed to sell its plants in the UK to Liberty House group, the firm said in a filing to the stock exchanges on Friday.
Shares of Amtek Auto gained as much as 4.88% to close at Rs31.15 to hit the upper circuit on Monday. In the past 12 months, Amtek Auto lost 35.10% while the benchmark index has gained Sensex gained 14.77%.
Due to lower revenue and an inventory loss, losses in the June quarter jumped to Rs889.6 crore from Rs319.7 crore a year ago, it said Friday.
Days after RBI identified it for early bankruptcy proceedings, two board members—vice-chairman and managing director John Ernest Flintham, and independent and non-executive director Sanjiv Bhasin—stepped down on 23 June, only to return the next day as company presidents.
On Friday, the company announced two more changes to its board. Independent director Bahushrut Lugani stepped down, while Gautam Malhotra was appointed as whole time director.
As per Insolvency and Bankruptcy Code 2016, once the application filed by a financial creditor under Section 7 of the IBC is admitted by the NCLT, a moratorium period of 180 days commences. During this period, the board of the defaulting entity is replaced with a resolution professional, who discharges the functions of the board till the time resolution process is completed.