New Delhi, July 11: The National Company Law Tribunal (NCLT) approved the resolution plan for bankrupt firm Amtek Auto, submitted by US-based hedge fund Deccan Value Investors LP (DVIL) on Thursday.
This brought to a close the three-year old case after the Supreme Court in June, refused to give more time for DVIL to assess the impact of the economic contraction caused by the pandemic.
A two-judge bench headed by Justice Ajay Kumar Vatsavayi passed the order, which as per the law, provides DVIL with 30 days to complete the payments, The Economic Times reported.
In February, lenders of Amtek Auto agreed to take an 80% haircut on the amount the bankrupt firm owed them by voting in favour of DVIL’s Rs 2,700 crore resolution plan.
The auto parts maker owed the IDBI and State Bank of India-led Committee of Creditors (CoC) a total of Rs 12,700 crore.
In its order, the Chandigarh bench of the NCLT also provided for an implementation and monitoring committee to oversee the implementation of the resolution plan.
“It is stated therein that from the NCLT approval date, an implementation and monitoring committee comprising of 5 persons of which one will be Mr. Dinkar T. Venkatasubramanian, three will be nominated by the key lenders, and one will be a nominee of the resolution applicants, to be constituted and the said committee shall continue to function until the effective date and shall stand dissolved upon acquisition of the corporate debtor by the resolution applicants,” the order said.
Venkatsubramanian was appointed by the CoC as the resolution professional for the case in August 2017, during initiation of the Corporate Insolvency Process.
Amtek Auto was among the first 12 companies sent to the NCLT by the Reserve Bank of India in 2017 under the Insolvency and Bankruptcy Code (IBC).
DVIL was the second successful bidder for Amtek Auto, after UK-based Liberty House Group (LHG) failed to make the requisite payments in July 2018 post the approval of its resolution plan.
Amtek Auto almost went into liquidation when the Sanjeev Gupta-led LHG was unable to make good on its Rs 4,800 crore bid.
DVIL had made a Rs 3,150 crore bid during the July 2018 round, but lowered it after the SC allowed a fresh round of bidding after the National Company Law Appellate Tribunal’s (NCLAT) February 2019 order for liquidation of the bankrupt firm.
As per the latest resolution plan, Amtek’s lenders will not be getting paid immediately since apart from the Rs 500 crore cash, it includes Rs 1,800 crore in future receivables which assumes recovery from tax refunds, sale of non-core real estate and other assets of the company. DVIL also offered Rs 300 crore from optionally convertible debentures (OCDs) payable over seven years.
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