29 March 2019: Liberty House Group plans to meet the 30-day deadline, set by the appellate company tribunal, to cough up a Rs 410-crore upfront payment to the lenders of bankrupt steel maker Adhunik Metaliks Ltd.
The London-based company has been provided this “one opportunity” by the National Company Law Appellate Tribunal to close the transaction by April 14, failing which the lower tribunal may pass an “appropriate order in accordance with law”. Sources close to Liberty said the company was “working hard” to complete the deal as directed by the court.
Sanjeev Gupta had made audacious bids for several bankruptcy facing companies such as Amtek Auto and ABG Shipyard. Even though it was selected as successful resolution applicants in several of them, the company has not been able to cross the line in any case.
The March 15 order of the NCLAT, which also rejects the plea of MSTC that demanded Rs 108.36 crore as “resolution process cost”, provides a window now to Liberty to start a well-sized metal business in India.
According to a previous order of NCLT Calcutta, Liberty House had to make an upfront cash payment of Rs 410 crore to the secured financial creditors, who collectively had a Rs 5,371.23-crore claim on Adhunik, by September 12.
However, the company deferred the payment and sought time from the Calcutta bench, as it wanted a “clean asset”, referring to the legal challenge mounted by MSTC.
State-run MSTC was listed as an operational creditor having a claim of Rs 108.36 crore on Adhunik. It had supplied iron ore, coal and other raw materials to the debt-laden company.
MSTC had objected to Liberty’s resolution plan approved by the CoC. The UK company is paying Rs 30 crore against a combined claim of Rs 273.27 crore by the operational creditors.
While the legal wrangle ensued, the committee of creditors, led by the State Bank of India, informed the Calcutta tribunal it was willing to start the resolution afresh.
The creditors showed a letter from the second-highest bidder Maharashta Seamless, agreeing to take over Adhunik.
The matter finally landed at the NCLAT which rejected the MSTC plea and allowed Liberty time to pay the dues. It is not yet known if MSTC will challenge the order at the Supreme Court.