The Chandigarh bench of NCLT (National Company Law Tribunal) has finally approved UK-based Liberty House’s bid to acquire debt-ridden Amtek Auto. On 5 Jul’18, the company had won the approval from CoC (Committee of Creditors) and was further presented to NCLT for its consent. With NCLT’s approval, Sanjeev Gupta-led Liberty House will be finally able to enter India.
The company had been trying to enter India three times since 2005 but backed off as the management felt that the policy environment and market conditions in India were not favourable for the investment.
Amtek Auto is based in Delhi and is one of the largest integrated auto component makers in India, with operations across forging, iron and aluminium casting, machining and sub-assemblies.
According to the reports, the company owes over INR 12,300 crore to its lenders. The lenders have taken a 67% haircut to allow Liberty’s binding offer of about INR 4,400 crore, which includes cash and bank guarantees. However, the company will be putting additional INR 500 crores towards working capital and INR 60 crores to clear dues of operational creditors.
The corporate insolvency resolution process was initiated against the company on 24 July 2017.
Amtek Auto is the second asset Liberty House had bid for through its participation in the resolution process. Last week the company’s bid for acquisition of Kolkata-based steel maker Adhunik Metalaliks has won the approval of CoC (Committee of Creditors) and is in the final stage of its approval from NCLT.
Interestingly Amtek Auto is a client of Adhunik Metaliks. Adhunik’s integrated operations and supply linkages to downstream industry, especially to Amtek Auto will enable Liberty House to build its value chain progressively.
Liberty House is also in the fray to acquire ABG Shipyard Ltd and Bhushan Power.
So far, Bhushan Steel, Electrosteel Steel and Monnet Ispat and Energy have been part of successful resolution process under the Insolvency and Bankruptcy Code (IBC).
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