The National Company Law Tribunal (NCLT) has approved a Rs 2,700-crore bid by Deccan Value Investors (DVI) for the debt-ridden Amtek Auto Ltd. The Chandigarh bench of the NCLT has approved the resolution plan by DVI for the auto components maker, which has a total debt of around Rs 12,700 crore.
The tribunal observed that the resolution plan submitted by DVI fulfils all the requirements of regulations of the corporate insolvency resolution process and has been approved by the Committee of Creditors (CoC).
"In view of the above, we accept and approve the Committee of Creditors approved resolution plan of Resolution Applicant-DVI," said a bench of NCLT members Pradeep R Sethi and Ajay Kumar Vatsavayi in its order passed on July 9, 2020.
It has also directed to create a committee of five persons for implementation of the 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 Dinkar T. Venkatasubramanian, three will be nominated by the key lenders, and one will be a nominee of the resolution applicants, to be constituted...
"...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 46-page-long NCLT order said.
The tribunal further said its order is binding on the corporate debtor and its employees, members, creditors, including the central government, any state government or local authority.
"The Resolution Applicant shall furnish the balance Performance Bank Guarantee within 15 days from the date of receipt of a certified copy of this order," it added.
The corporate insolvency resolution process of Amtek Auto was initiated on July 24, 2017 by the NCLT. It was among the first list of 12 companies sent to the NCLT by the RBI in 2017 for resolution under the Insolvency and Bankruptcy Code (IBC).
In 2018, the UK-based Liberty House Group's Rs 4,025 crore bid was approved by the NCLT. However, the group later backtracked and did not furnish the performance guarantee.
Then in August 2019, the National Company Law Appellate Tribunal (NCLAT) ordered liquidation of Amtek Auto, declining the lenders' request for extension of the insolvency resolution process deadline after they had failed to find a buyer within the stipulated time.
The NCLAT order was later challenged in the Supreme Court, which on September 24, 2019 stayed the liquidation proceedings of Amtek Auto.
The apex court had permitted the Resolution Professional to invite fresh offers from prospective resolution applicants within 21 days.
The CoC, after evaluation of offers by four prospective resolution applicants, declared DVI as the preferred/H1 bidder as per the evaluation criterion.
DVI put in a bid of Rs 2,700 crore, out of which Rs 500 crore is upfront cash payment and rest future receivables.
DVI's resolution plan dated January 17, 2020, was approved by the CoC by a majority of 70.07 per cent votes at its meeting held on February 7, 2020.