Resolution Process Of Amtek Auto Set To Start All Over Again After Supreme Court Allows Fresh Bids To Be Invited

The resolution process for Amtek Auto will be started all over again with Supreme Court allowing the resolution profession (RP) and committee of creditors (CoC) to invite fresh bids for the debt-ridden company within 21 days and complete the process in two weeks thereafter.

The resolution plan for Amtek was approved by National Company Law Tribunal in July 2018 with the sole bidder UK-based Liberty House's resolution emerging as the successful resolution applicant.

However, the process remained inconclusive till date as Liberty House defaulted in honoring the payment commitment it made for Amtek.

Incidentally, lenders have an exposure of around Rs 12,000 crore to Amtek Auto and they are keen to complete the resolution process to prevent further losses on their exposure.

Amtek Auto stared at the prospect of getting liquidated in the absence of a resolution plan but recently, the Supreme Court stayed its liquidation proceedings. In August, the company filed appeal in the SC against an order passed by the National Company Law Appellate Tribunal (NCLAT).

By July 2108, Liberty House emerged as the successful bidder for Amtek Auto with an offer to pay Rs 3,225 crore upfront to the financial creditors and infuse another Rs 500 crore for stabilizing and improving operations.

After Liberty failed to pay up, NCLT's Chandigarh bench had recommended prosecution and allowed it to withdraw the bid after imposing a cost on it. On May 4, the Insolvency and Bankruptcy Board of India (IBBI), on an application from the lenders, filed a criminal complaint against Liberty House under Section 74 of IBC. This section provides for prosecution and punishment including a jail term of up to five years and a penalty of up to Rs 1crore.

Sanjeev Gupta and three top executives of Liberty House were summoned by a special court for a ‘willful' breach of the resolution plan and asked to be present on July 11. Liberty House, in turn, had accused the resolution professional and Amtek Auto's previous owners of misrepresenting facts in the information memorandum.