13 March 2019: Even though lenders to the beleaguered auto component maker Amtek Auto are looking for the second highest bidder Deccan Value Investors to stick to their original price of Rs 3,150 crore for the asset, lawyers say that with first bidder Liberty House defaulting, the valuation of the company may also take a hit.
Indeed, say sources, the second bidder or H2 is not obligated to honour its earlier bid price for the asset.
“Liberty House’s allegation that there were discrepancies in the information memorandum is now public knowledge. With Liberty House defaulting on those grounds, the next bidder will also know that the picture is not as rosy as earlier imagined. The possibility is remote that someone in 2019 will bid higher than they did in 2018. So yes, there should be an impact on the price of the asset,” said Punit Dutt Tyagi, executive partner, Lakshmikumaran & Sridharan.
According to sources with knowledge of the matter, currently the H2 US-hedge fund Deccan Value Investors is doing their due diligence to re-evaluate the asset and resubmit their bid based on latest financial results.
Lenders want them to stick to their original price of Rs 3,150 crore upfront but it is “not binding” on them to comply.
The bid is expected to come in the next couple of weeks.
Meanwhile, Deccan Value Investors was also the successful bidder for Amtek Auto subsidiary Metalyst Forgings and had alleged that the plan for Metalyst has been affected by misrepresentation of facts. However, sources say the latest NCLT order says that their request is malafide.
Bids for other Amtek subsidiaries have also run into rough weather.
Recently the National Company Law Appellate Tribunal (NCLAT) allowed the withdrawal of the Liberty House bid for Amtek subsidiary ARGL. Sources said there are other bidders for the subsidiaries. As for the defaulting H1 Liberty House, the RP will pursue the matter with the Insolvency and Bankruptcy Board of India regarding criminal proceedings.