The National Company Law Appellate Tribunal (NCLAT) on Friday ordered the liquidation of Amtek Auto, turning down a plea by the lenders for a new round of bidding. The liquidation value for the bankrupt auto components maker, which owes lenders Rs 12,603 crore, is Rs 4,119 crore.
With the 270 days timeline for the corporate insolvency resolution process over, a bench headed by Justice SJ Mukhopadhaya on Friday ruled against a second round of bidding. A consortium of banks led by Corporation Bank had initiated insolvency proceedings against Amtek in July 2017.
The liquidation follows an unsuccessful resolution process for the company.
While Liberty House Group had bid Rs 4,025 crore and was declared the successful resolution applicant by the Chandigarh bench of National Company Law Tribunal (NCLT) in July 2018, it backed out of the deal citing inflated values of assets.
The second highest bidder was Deccan Value Investors (DVI), which had offered Rs 3,150 crore. However, once Liberty House had been declared the winner, DVI withdrew its offer.
“… we are not inclined to give any direction as was sought for by the ‘committee of creditors’ nor inclined to exclude any period calling for fresh ‘resolution plan’. More than 270 days having passed, the Adjudicating Authority will pass appropriate order of liquidation, which will be in accordance with law,” Justice Mukhopadhaya said in the Friday order.
On June 13, the resolution professional (RP) for Amtek Auto, Dinkar Venkatasubramanian, and the CoC had sought fresh bids for the debt-ridden company after Liberty House Group backed out. This was based on a new information memorandum.
However, he was pulled up by the NCLAT on June 26 with the appellate tribunal saying no new bidders could participate. The NCLAT asked the RP to consider only plans submitted by DVI and others based on the original information memorandum.
The NCLAT also set aside the NCLT Chandigarh’s order referring Liberty House’s U-turn on the binding bid to Insolvency and Bankruptcy Board of India for action.
According to the RP, the average liquidation value of Amtek Auto’s assets was Rs 4,119 crore, including Rs 1,128 crore for fixed assets like plant and machinery. Liberty House’s assessment, however, valued the fixed assets at around Rs 400-500 crore. Amtek is an integrated auto component manufacturer with operations across forging, iron and aluminium casting, machining and sub-assemblies.