20 June 2019: The Cuttack bench of the National Company Law Tribunal (NCLT) has reserved its order on a plea by lenders seeking reinitiation of the corporate insolvency resolution process (CIRP) against bankrupt Adhunik Metaliks (AML). The plea was filed after UK-based Liberty House allegedly failed to make the upfront cash payment of Rs 410 crore even within the extended timeline to acquire the debt-ridden company.
After hearing arguments from counsels for the committee of creditors (CoC) for AML and Liberty House, Justice MB Gosavi on Tuesday reserved his order on all applications, including reinitiation of the CIRP process for the steelmaker.
Earlier, in his submission before the tribunal, the CoC counsel had appealed to re-initiate the CIRP process as Sanjeev Gupta-led Liberty House had not paid the required upfront cash payment of Rs 410 crore to lenders by April 14, the stipulated deadline set by the National Company Law Appellate Tribunal (NCLAT), for acquisition of AML.
In response, Liberty House’s counsel had said the group would need more time to make the payment as regulatory approvals were still pending for Adhunik Metaliks under the insolvency resolution process.
Lenders to Adhunik Metaliks are SBI, PNB, ICICI Bank, IFCI, Punjab & Sind Bank, UCO Bank, Allahabad Bank, Bank of Baroda, Corporation Bank and SREI Infrastructure Finance, among others.
The Kolkata bench of the NCLT had in July last year approved the resolution plan submitted by Liberty House, with lenders agreeing to take a haircut of around 92% and settling for Rs 410 crore against their outstanding dues of Rs 5,370 crore. There were only two resolution applicants for the debt-ridden steel manufacturing company — Liberty House and Maharashtra Seamless of the DP Jindal Group. LHG was identified as the highest bidder by the creditors, while the plan of Maharashtra Seamless was rejected as it was offering less value than the liquidation value of the firm.
Notably, the LHG had earlier failed to meet the deadline for payment under CIRP within the stipulated time for Amtek Auto, prompting the Chandigarh bench of the NCLT to allow its lenders to go for a fresh round of bidding.
Last month, the Insolvency and Bankruptcy Board of India (IBBI) filed a criminal complaint against Liberty House Group for withdrawing after successfully bidding for Amtek Auto.