Liberty House gets NCLT nod to acquire Amtek Auto
Lenders take a 67% haircut to allow Liberty’s binding offer
MUMBAI: The Chandigarh bench of the National Company Law Tribunal (NCLT) on Wednesday approved the resolution plan by single bidder Liberty House to acquire the assets of debt-laden Amtek Auto Ltd. The company was among the Reserve Bank of India (RBI)’S first list of 12 accounts undergoing insolvency resolution.
The division bench of justice RP Nagrath and technical member Pradeep R Sethi approved the resolution plan following an insolvency plea filed by Corporation Bank against the auto component manufacturer.
Liberty House is part of the Sanjeev Gupta-led global industrial group GFG Alliance.
“This is a very significant moment. We are very excited about this opportunity to restore a great Indian business to its rightful position and add a major new asset portfolio to our international network,” said a Liberty House spokesperson.
New Delhi-based Amtek Auto owes over ₹12,300 crore to its lenders. The lenders have taken a 67% haircut to allow Liberty’s binding offer of about ₹4,400 crore, which includes cash and bank guarantees.
“Liberty is set for a major automotive growth following the NCLT nod for Amtek Auto resolution plan,” the Liberty House spokesperson added.
A banker involved in the resolution process said that while recoveries for creditors will be Rs 4,404 crore, Liberty House will be putting in an additional Rs 500 crore towards working capital and another Rs 60 crore to clear dues of operational creditors. “Besides these, Liberty House will also invest another Rs 1000 crore over the next 2-3 years,” he added. He declined to be named as the stock exchanges have not been notified yet.
He also said the NCLT judgement vindicates that while there could be some questions over eligibility, value maximisation is important. “There were some questions over the eligibility of Liberty House on account of some disputed outstanding liability. Once it was cleared, the firm was declared as the highest bidder. Amtek is a unique case in terms of resolution as this is the first B2B centric firm of the first list which has been resolved under the IBC,” he said.
The announcement of Liberty as the successful preferred bidder was made before the committee of creditors on Tuesday and was confirmed by the insolvency resolution professional on Wednesday. The corporate insolvency resolution process was initiated against the company on 24 July 2017.
“Liberty House... is set to make a dramatic entry into India after being chosen as the preferred H1 bidder for Amtek Auto assets, which include 35 automotive component plants across India, Japan, Thailand and Spain, employing some 6,000 people,” the company was quoted saying to the Press Trust of India. Dinkar Venkatasubramanian, the resolution professional of Amtek Auto, did not respond This is Liberty House’s second acquisition through RP after Adhunik Metaliks to a request for comment.
Amtek is one of the largest integrated auto component manufacturers in India with operations across forging, iron and aluminium casting, machining and sub-assemblies.
The company’s liquidation value was pegged at ₹4,000 crore, almost 33% below its dues.
The company is one of the major suppliers to Maruti Suzuki Ltd and Tata Motors Ltd.
Amtek was the second asset Liberty House had bid for through its participation in the resolution process. Last week, it had successfully bid for Kolkatabased steel maker Adhunik Metaliks, which owed ₹5,300 crore to its lender.
PTI contributed to this story.