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NCLT: Resolution Plan approved for Amtek Auto

NCLT:  Resolution Plan approved for Amtek Auto

As per our reports, The National Company Law Tribunal (NCLT) approved the resolution plan on  09th July for the bankrupt firm ‘Amtek Auto’, which was submitted by US-based security fund Deccan Value Investors LP (DVIL). The insolvency proceedings were initiated three years ago when the subsidiary company of Amtek Auto ‘ARGL’ (Amtek Ring Gears Limited) was moved before the Adjudicating Authority by the State Bank of India in 2017 for defaulting on loans worth around Rs. 360 crore.

The company also owes debts of about Rs. 900 crore to other lenders. In March 2018, the Principal Bench of NCLT agreed that a default had occurred & took over the company for insolvency resolution under the Insolvency & Bankruptcy Code (IBC).

A two-judge bench headed by Justice Ajay Kumar Vatsavayi passed the above order, which as per the provisions of the IBC, provides DVIL a time period of 30 days to make the payment. In February, lenders of Amtek Auto agreed to take         80% from the amount which the bankrupt firm owed to them by voting in favor of Rs. 2,700 crore resolution plan of DVIL. The auto components maker, Amtek Auto took loans from the Industrial Development Bank of India) IDBI & State Bank of India-led Committee of Creditors (CoC) a total of Rs. 12,700 crore.

Venkatsubramanian was appointed by the CoC as the Resolution Professional for the case in August 2017, during the initiation of the Corporate Insolvency Resolution Process. The Corporate Insolvency Resolution Process of Amtek Auto was initiated on 24th July 2017. As per the latest resolution plan, the lenders of Amtek Auto will not be paid immediately since apart from cash amounting to Rs. 500 crore, it has to pay Rs. 1,800 crore in the near future which is to be recovered from income tax refunds, sale of non-core real estate & other assets of the company.  


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