The Chandigarh bench of the National Company Law Tribunal (NCLT) has issued a notice to Amtek Auto in connection with the petition filed by Corporation Bank against the firm under the Insolvency and Bankruptcy Code. The tribunal has told Amtek Auto to respond to the insolvency proceedings filed by the bank on or before 20 July, when the case will come up for hearing next, said sources familiar with the development.
The Delhi-based auto ancillary maker- Amtek Auto is in default of Rs 14,074 crore. The lenders to the troubled company include Dena Bank, Corporation Bank, Bank of Maharasthra, among others. According to sources, the firm owes over Rs 800 crore to Corporation Bank, the lead bank of the consortium of lenders. According to sources, the company is “still in the process of studying the matter and evaluating the options available”. An email sent to a representative of the company remained unanswered.
For the year ended March 31, 2017, Amtek Auto had reported a net loss of Rs 2,533.46 crore and is one of the 12 defaulter companies that constitute around 25 per cent of gross bad loans, according to sources. The proceedings against Amtek Auto follows a directive by Reserve Bank of India (RBI) on June 13 to banks asking them to refer 12 troubled companies with a combined debt of close to Rs 2.5 lakh crore to the NCLT.
The 12 accounts identified by the central bank are those in which banks have an exposure of more than Rs 5,000 crore, more than 60 per cent of which has been recognised as non-performing assets (NPAs).
Amtek Auto has been struggling to stage a turnaround ever since it reported “temporary cash flow mismatch” in 2015 and defaulted on payment of an estimated Rs.800 crore bond offering. The difficulty in redeeming the Foreign currency convertible bonds (FCCBs), got compounded after the market watchdog Securities and Exchange Board of India (Sebi) ordered a probe into Castex Technologies, an auto parts maker and subsidiary of Amtek Group for alleged share price manipulation.