Lenders to the bankrupt Adhunik Metaliks (AML) are planning to appeal before the National Company Law Tribunal (NCLT) to debar UK-based Liberty House Group (LHG) from the corporate insolvency resolution process (CIRP) and restart the process by inviting fresh bids, banking sources close to the matter said.
The move comes after Liberty House failed to make the upfront cash payment of Rs 410 crore even within the extended timeline.
The lenders are issuing a notice to Sanjeev Gupta-led Liberty House saying that they are rejecting the latter’s proposal to move a joint application before the NCLT’s Cuttack bench, seeking further extension of time for the upfront payment.
“Liberty had sent some communications to the lenders to move an application jointly before the tribunal for further extension of the timeframe for upfront payment. But we are telling them that a lot of time has already been taken. So, we are not considering any of its appeals as they are not valid,” a source at State Bank of India (SBI) told FE.
Earlier, citing non-receipt of requisite regulatory approvals, the UK-based group 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 the acquisition of debt-ridden AML. “We are working on procuring statutory and regulatory approvals which are a vital part of the implementation plan. Regulatory approvals from the stock exchanges are still pending for Adhunik Metaliks in order to receive money under CIRP from us,” a Liberty House spokesperson told FE on April 14.
When contacted for a comment on the lenders issuing notice to the LHG rejecting its proposal, the spokesperson said she was not aware of it.
The matter is listed before the Cuttack bench of the NCLT on April 30.
“We had filed an application for the re-initiation of the CIRP process, debarring Liberty, in the month of January. But we could not go ahead with it as Liberty House had approached the NCLAT. Now, we will be listing the application for hearing, citing non-compliance of the NCLAT order by the group,” the sources said, adding many companies have already shown interest in buying the debt-ridden company.
Lenders to Adhunik Metaliks are SBI, Punjab National Bank, 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 `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 (H1) by the creditors, while the plan of Maharashtra Seamless was rejected as it was offering less value than the liquidation value of the company.
Source: Financial Express, April 23, 2019