Appellate tribunal lashes out at Amtek Auto CoC, RP for calling new bids

Appellate tribunal says CoC, RP free to renegotiate with bidders for improving on original bids

The National Company Law Appellate Tribunal (NCLAT) on Wednesday slammed the Committee of Creditors (CoC) and the Resolution Professional (RP) of Amtek Auto for issuing a fresh information memorandum calling new bids for the company. The NCLAT’s observations came on a plea moved by Deccan Value Investors LP (DVI), which alleged that the new Expression of Interest (EOI) calling for fresh bids disqualified it as a bidder for Amtek Auto. On June 13, the RP of Amtek Auto called for fresh submission of binding resolution plan based on a new information memorandum.

According to the new EOI, resolution applicants who “had withdrawn or sought any deviation from their resolution plan in any corporate insolvency resolution process after CoC approval, or avoided or delayed or defaulted in the implementation of the resolution plan approved by committee of creditors and NCLT or delayed or failed to implement any conditions as contained in the process document,” would not be eligible to bid for Amtek Auto.

DVI challenged the new information memorandum and the eligibility criteria alleging that the same was done in contravention of NCLAT’s orders. The company had run into trouble while bidding for Metalyst Forgings and had withdrawn its bid after approval from CoC and NCLT.

The second round of bidding was allowed by the NCLAT after UK-based Liberty House Group, which was initially declared successful, withdrew from the process. The NCLAT had then allowed the CoC and RP to consider all the bids that had been placed, but said that the final decision would not be placed before National Company Law Tribunal (NCLT). At the time, it had also not allowed a new information memorandum or fresh EOI to be called.

On Wednesday, the NCLAT also allowed the CoC and RP to renegotiate with the bidders, including DVI, and improve upon their plan submitted for Amtek Auto. It also said that the CoC and RP would now consider all the bids that had come so far, including that of DVI. 

Amtek Auto’s total dues to lenders in July last year stood at Rs 12,603 crore. DVI, which had emerged as the second highest resolution applicant for Amtek Auto after Liberty House, had placed a bid of Rs 3,150 crore.