Three years after Amtek Auto was admitted into insolvency, the Chandigarh Bench of the National Company Law Tribunal (NCLT) has approved Deccan Value Investors’ (DVI) Rs 2,700-crore resolution plan for the auto parts maker, that has a debt of Rs 12,600 crore. DVI’s plan approved by the Chandigarh Bench is its second bid for Amtek Auto. In the initial round of bidding for the company in 2017, the hedge fund had put up a bid of Rs 3,150 crore. The second round of bidding for the debt-laden Amtek Auto, however, saw DVI cut its bid to Rs 2,700 crore. However, the new resolution plan by DVI is fraught with complications and it may not see the light of the day, legal experts and lawyers involved in the case said. DVI has, in the past, indicated its unwillingness to pursue the resolution plan. In a petition, DVI had requested the Supreme Court to allow it to withdraw its offer for Amtek Auto. The apex court had then taken stern view of the plea and said that if DVI tried to withdraw its offer, it would be treated as a “contempt of court”. In a similar plea, the hedge fund had in 2018 petitioned the Mumbai Bench of NCLT to allow it to withdraw its offer for Metalyst Forgings, a subsidiary of Amtek Auto. DVI had taken over the company under the Insolvency and Bankruptcy Code (IBC) proceedings. Apart from that, DVI’s new resolution plan also hinges on a lot of future receivables such as tax refunds that Amtek Auto is likely to get from the government and sale of some of the assets which are not as important for the operations of the company. “The total upfront cash payment is just Rs 500 crore. And this is only an approval by the NCLT. There will be operational and financial creditors who will be unsatisfied with what they get and they will approach the appellate tribunal or higher courts,” a lawyer who appeared for one of the financial creditors said. On a plea filed by consortium of lenders led by Union Bank of India, the Chandigarh Bench of NCLT had, on July 24, 2017, admitted Amtek Auto into insolvency. A year later, on July 25, 2018, a Rs 4,025-crore resolution plan, submitted by the Liberty House Group, was approved by the NCLT. When the committee of creditors and the resolution professional moved applications for implementation of the resolution plan, Liberty House backtracked on its offer citing “blatant discrepancies in the condition of machinery, valuations, and representations made in the information memorandum and valuation reports”.
