NCLT approves Deccan Value Investors’ bid for Amtek Auto
The National Company Law Tribunal (NCLT) on 09th July, 2020 approved of Deccan Value Investor’s Rs. 2700 crore bid. This bid was made for Amtek Auto Ltd., a debt-ridden company which manufactures automobile components. Amtek Auto Ltd. has a debt of about Rs. 12,700 crore.
NCLT observed that the resolution plan fulfilled all the necessary requirements of regulations of corporate insolvency resolution process. It further observed the Committee of Creditors (CoC) has also approved of the resolution plan.
The bench headed by NCLT members Pradeep R Sethi and Ajay Kumar Vatsavayi in an Order stated that they approved of the CoC approved plan of the Resolution Applicant. It further directed formation of a five-member committee which would overlook the implementation of this plan.
The tribunal further specified in its Order that its Order would be binding on the corporate debtors, members, creditors, employees, Central Government, State Government and the local authorities. The NCLT was informed that the DVI would furnish the balance Performance Bank Guarantee within 15 days from receipt of the said Order.
NCLT began the corporate insolvency resolution process of Amtek Auto Ltd. on 24th July, 2017. It was amongst the companies which RBI sent to NCLT for resolution under the Insolvency and Bankruptcy Code (IBC).
However DVI isn’t the first company to try to acquire Amtek. Earlier in 2018, Liberty House Group from UK bid Rs. 4025 crore which was approved by the NCLT. Later though, the company backtracked and failed to furnish NCLT with the Performance Guarantee.
Earlier in late 2019, NCLT had ordered liquidation of Amtek and declined their request for extension of the resolution process. NCLT made this order as the lenders failed to find any buyer in the allotted time. When challenged, the Supreme Court stayed the liquidation process and gave a 21 day extension to the lenders to find new buyers.
After assessing 4 offers, CoC declared DVI as preferred bidders. DVI’s offer of Rs. 2700 crores includes a massive Rs. 500 crore upfront cash payment and rest future receivables.
