The committee of creditors (CoC) of Adhunik Metaliks approved UK-based Liberty House’s resolution plan for the insolvent company on Thursday, the last day of the extended timeline for the corporate insolvency resolution process (CIRP) for the steelmaker.
There were only two resolution applicants for the debt-laden steel manufacturing company — Liberty House and Maharashtra Seamless of the DP Jindal Group. Liberty House was already 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, the flagship of the Adhunik Group.
“…The committee of creditors at the meeting held today approved the resolution plan submitted by the Liberty House Group Pte with a majority of 99.94%,” Adhunik Metaliks (AML) said in a stock exchange filing.
On Thursday, the Sanjeev Gupta-led metals and industrial group’s resolution plan for Zion Steel, another Adhunik Group company, also got approval from the creditors.
The CoC had met on Monday and also on Wednesday to consider approving the resolution plan submitted by Liberty House. However, those meetings were inconclusive. Now, after the approval of the resolution plans for both AML and Zion Steel, resolution professional Sumit Binani will put up the plans to the Kolkata bench of the National Company Law Tribunal (NCLT) for its approval and passing necessary orders in this matter.
Sources told FE that according to the resolution plans, Liberty House would infuse over Rs 600 crore into the two companies — AML and Zion Steel. Notably, for AML, standalone debt had stood around Rs 2,500 crore.
Lenders to AML are 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, among others. In case of this company, as many as 18 financial creditors submitted claims worth over Rs 5,380 crore, while claims over Rs 5,370 crore were admitted.
“Adhunik Metaliks is a big supplier to the automotive industry. The acquisition of the company will reinstate our green steel and green aluminium vision globally,” a Liberty House spokesperson said, adding that the CoC would now issue the letter of intent (LoI) to the UK-based group as per the procedure. She, however, declined to give details on the final offer size for the debt-laden company. RP Binani was unavailable for a comment.
AML has an integrated steel plant at Odisha’s Sundergarh. However, currently the plant is not operating due to no power supply.
Earlier, FE had reported that lenders were negotiating with Liberty House for exploring the opportunity to raise its offer for the bankrupt company after it had received additional time to complete the ongoing insolvency resolution process. For both AML and Zion Steel, the extended period of corporate insolvency resolution process (CIRP) expired on July 5. Notably, the Kolkata bench of the NCLT on June 15 had ordered exclusion of 20 days from the mandated 270-day deadline under the CIRP for the two Adhunik Group companies.
Bankruptcy proceedings against AML, Zion Steel and another Adhunik Group company Orissa Manganese & Minerals were admitted by the Kolkata bench of NCLT in August last year.