In yet another attempt to save the auto components manufacturer Amtek Auto from liquidation, the Supreme Court on Monday ordered the committee of creditors (CoC) of debt-laden company to invite fresh bids within a month.
Recalling its earlier orders of September 24 and November 13 that asked the lenders to invite fresh bids and consider only five offers received within the time specified in the advertisement, respectively, a bench led by Justice Arun Mishra gave 30 days to the lenders to invite bids and another three weeks thereafter for evaluation of bids. It also asked the CoC to place its decision before the court after proper evaluation.
The order came after CoC told the SC that the earlier orders were passed considering that there were only three resolution plans and two financial offers. While only Samvardhana Motherson International had submitted its resolution plan within the deadline, the lenders had also received SREI Multiple Asset investment Trust and Deccan Value Investors' resolution plans. The CoC also received financial proposals from UV Asset Reconstruction Company, and Asset Care and Reconstruction.
The apex court on September 24 had allowed resolution professional and lenders to invite fresh bids and decide on final resolution plan within two weeks thereafter. This order had saved the company from liquidation after no resolution was found within the 270-day deadline as UK-based Liberty House, the successful bidder, backed out citing technical reasons. Later on November 13, the apex court said that "the consideration to be confined to five offers received within the time specified in the advertisement inviting offers."
"Two offers received thereafter not to be considered. Let a decision be taken by the CoC as to the offers which were received within the time limit within three weeks from today and be placed before this court," the bench said.
The apex court had on September 6 stayed the NCLAT decision ordering liquidation of the debt-ridden firm. Amtek featured on the first list of 12 companies that were referred by the RBI for initiating insolvency process in 2017.
The lenders led by Corporation Bank had told the SC that Amtek Auto being a financially viable entity was being pushed into liquidation merely on account of the fact that Liberty House had defaulted in implementing the resolution plan. It submitted that the automobile sector was going through a recession, and sending Amtek Auto into liquidation will not serve anyone's purpose. Amtek Auto has a liability of around Rs 11,500 crore.
The Insolvency and Bankruptcy Board of India (IBBI) has also moved the SC seeking to initiate criminal proceedings against Liberty House for backing out. IBBI, in its appeal, has stated that the National Company Law Appellate Tribunal (NCLAT) had rendered them powerless and taken away its and the Central government's powers to grant sanction before initiating trial under Section 236 of the IBC before a special court.