The fate of the debt-ridden Adhunik Metaliks continues to hang in balance with the Kolkata bench of NCLT on Monday refusing to issue any order to Liberty House, which has missed deadline to pay Rs 400 crore upfront to the lenders.
The bench of National Company Law Tribunal (NCLT), a quasi-judicial body that adjudicates issues relating to Indian companies, without passing any order observed that “the only recourse remaining for the committee of creditors (CoC) is to take steps for liquidation as there has been failure to make payment in terms of the plan.”
Interestingly, Liberty House has also missed the deadline to pay lenders of Amtek Auto.
In case of Adhunik Metaliks, Liberty House was supposed to make an upfront payment of Rs 400 crore by September 21. After it missed the deadline, lenders of Adhunik Metaliks moved NCLT seeking a direction to the UK-based steel company to pay up.
However, the Kolkata bench of NCLT said on Monday that it had no power to issue any such notice.
The UK-based steel major, which had made a binding offer to purchase ArcelorMittal’s steel plants in Europe, won assets of both Adhunik Metaliks and Amtek Auto in July and according to the resolution plan, it was to pay lenders Rs 4,810 crore by September-end and October.
The company has an admitted debt of around Rs 5,000 crore, according to court filings, and lenders to Adhunik Metaliks include State Bank of India, Punjab National Bank, ICICI Bank, IFCI, Punjab & Sind Bank, UCO Bank, Allahabad Bank, Bank of Baroda, Corporation Bank and Srei Infrastructure Finance.
The lenders had total admitted claims of over Rs 5,300 crore towards the insolvent steelmaker.
In Adhunik Metalik’s case, there were only two resolution applicants — Liberty House and Maharashtra Seamless, a DP Jindal Group company. While the former was selected as the eligible highest (H1) bidder, issues cropped up under section 29A of the Insolvency and Bankruptcy Code (IBC), 2016.
Under this section, a bidder can be disqualified for several reasons, including loan default in any of the company’s subsidiaries. The company, in a regulatory filing on July 17, had said the Kolkata bench of NCLT had passed a verdict approving the resolution plan submitted by Liberty House Group to take over its 0.45 million tonne integrated steel plant in Odisha, which also has coal and iron ore mines in that state.
The advocate representing CoC apprised NCLT that in terms of the resolution plan the resolution applicant (Liberty House) was supposed to make a an upfront cash payment of Rs 400 crore by September 21, 2018, but have failed to make such payment till date.
CoC was also served with a copy of application made by Liberty House seeking an extension of time to make payment of the upfront cash.
The application served on the CoC served on October 10 has not been listed yet.
Although there was no official communiqué from Liberty House, it was learnt that the UK-based company wants several disputed court cases in the insolvency tribunals like NCLT/NCLAT to be resolved before closure of these deals and other formalities like approval of the Competition Commission of India (CCI).