The creditors of automobile component maker Amtek Auto Ltd have okayed a bankruptcy resolution plan proposing around 80% haircut submitted by US-based hedge fund Deccan Value Investors LP.
Amtek was among the first 12 companies directed by the central bank to the bankruptcy tribunal in 2017.
The resolution plan worth Rs 2,650 crore, which includes an upfront cash payment of Rs 450 crore only, is significantly smaller than Amtek’s dues amounting to Rs 12,700 crore. The offer made by the employee-owned investor in 2018 was higher at Rs 3,150 crore.
However, the current resolution plan is higher than the liquidation value that now stands at Rs 1,800-1,900 crore. In 2018, the New Delhi-based firm's liquidation value was determined at Rs 4,119 crore.
Besides the small upfront cash payment, the current resolution plan includes Amtek’s future receivables from sale of non-core investments in subsidiaries and optionally convertible debentures.
Three of Amtek group companies -- Castex Technologies, Amtek Ring Gears and Metalyst Forgings -- are undergoing separate insolvency resolution processes.
Amtek, among the first 12 companies directed by the central bank to the bankruptcy tribunal in 2017, was almost driven into liquidation last year after Liberty House presented a Rs 4,025 crore resolution plan but the UK-based entity failed to honour its commitment.
Liquidation was averted by the Supreme Court which allowed lenders to start a fresh bidding process, nearly two years after bankruptcy proceedings first began for the debt-laden company.