Mumbai: The Chandigarh bench of the National Company Law Tribunal (NCLT) on Wednesday approved the resolution plan by single bidder Liberty House to acquire the assets of debt-laden Amtek Auto Ltd. The company was among the first list of 12 large bad loan accounts that the Reserve Bank of India (RBI) identified for insolvency resolution.

The division bench of justice R.P. Nagrath and technical member Pradeep R. Sethi approved the resolution plan following an insolvency plea filed by Corporation Bank against the auto component manufacturer.

Liberty House is part of the Sanjeev Gupta-led global industrial group GFG Alliance.

“This is a very significant moment. We are very excited about this opportunity to restore a great Indian business to its rightful position and add a major new asset portfolio to our international network," said a Liberty House spokesperson.

New Delhi-based Amtek Auto owes over 12,300 crore to its lenders. The lenders have taken a 67% haircut to allow Liberty’s binding offer of about 4,400 crore, which includes cash and bank guarantees.

“Liberty is set for a major automotive growth following the NCLT nod for Amtek Auto resolution plan," the Liberty House spokesperson added.

A banker involved in the resolution process said that while recoveries for creditors will be 4,404 crore, Liberty House will be putting in an additional 500 crore towards working capital and another 60 crore to clear dues of operational creditors. “Besides these, Liberty House will also invest another 1,000 crore over the next 2-3 years," he added. He declined to be named as the stock exchanges have not been notified yet.

He also said the NCLT judgement vindicates that while there could be some questions over eligibility, value maximisation is important. “There were some questions over the eligibility of Liberty House on account of some disputed outstanding liability. Once it was cleared, the firm was declared as the highest bidder. Amtek is a unique case in terms of resolution as this is the first B2B centric firm of the first list which has been resolved under the IBC," he said.

The corporate insolvency resolution process was initiated against the company on 24 July 2017.

“Liberty House... is set to make a dramatic entry into India after being chosen as the preferred H1 bidder for Amtek Auto assets, which include 35 automotive component plants across India, Japan, Thailand and Spain, employing some 6,000 people," the company was quoted saying to the Press Trust of India.

Dinkar Venkatasubramanian, the resolution professional of Amtek Auto, did not respond to a request for comment.

Amtek is one of the largest integrated auto component makers in India, with operations across forging, iron and aluminium casting, machining and sub-assemblies.

The company’s liquidation value was pegged at 4,000 crore, almost 33% below its dues.

The company is one of the major suppliers to Maruti Suzuki Ltd and Tata Motors Ltd.

Amtek was the second asset Liberty House had bid for through its participation in the resolution process. Last week, it had successfully bid for Kolkata-based steel maker Adhunik Metaliks, which owed 5,300 crore to its lender.

The company is also in the fray to acquire ABG Shipyard Ltd and Bhushan Power.

So far, Bhushan Steel, Electrosteel Steel and Monnet Ispat and Energy have been part of successful resolution process under the Insolvency and Bankruptcy Code.

maulik.v@livemint.com

PTI contributed to this story.

Close