Ready to acquire Adhunik Metaliks, Maharashtra Seamless tells lenders

By: | Published: January 25, 2019 12:18 AM

The NCLT reserved its order on the CoC’s application for granting an extension of time in the corporate insolvency resolution process (CIRP) in this case.

Adhunik Metaliks, Maharashtra Adhunik Metaliks, acquiring Adhunik MetaliksReady to acquire Adhunik Metaliks, Maharashtra Seamless tells lenders

Lenders to bankrupt Adhunik Metaliks (AML) on Thursday filed appeals before the Kolkata bench of the National Company Law Tribunal (NCLT) for providing additional time for completion of the insolvency resolution process, as they have received application from Maharashtra Seamless stating that it is ‘ready’ to acquire the debt-ridden company.

The NCLT reserved its order on the CoC’s application for granting an extension of time in the corporate insolvency resolution process (CIRP) in this case.

While UK-based Liberty House, the successful resolution applicant, failed to make the upfront cash payment within the stipulated time, Maharashtra Seamless, the second-highest bidder (H2), has submitted an application to the Committee of Creditors (CoC) informing that it has the fund ready to take over the debt-ridden steel manufacturer, CoC’s counsel Joy Saha said in his submission before the Bench of Justice Jinan KR.

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“As the value of the assets of AML is going down, at least the CoC should be allowed to talk to the other bidders while the litigation is pending. And for that, the committee needs the RP (resolution professional). The RP is also required for taking care of assets of the company,” Saha said while praying for granting an extension of time in the CIRP and also re-appointment of the RP.

“Maharashtra Seamless has told us that `500 crore is ready with it for the acquisition,” Saha said. In its application, the CoC has sought additional time of 12 weeks from Thursday for completing the insolvency resolution process.

Notably, there were only two resolution applicants for AML — Liberty House and Maharashtra Seamless of the DP Jindal group. Liberty House was identified as the highest bidder (H1) by the creditors, while the plan of Maharashtra Seamless was then rejected as it had been offering less than the liquidation value of the company.

On Thursday, appearing on behalf of Liberty House, advocate Gopal Mukherjee, contested Saha’s arguments. “Now, neither can the insolvent firm go for liquidation, nor can the extension of CIRP process be granted,” he argued.

Last month, the lenders, led by the State Bank of India, had rejected an offer of Liberty House, a part of Sanjeev Gupta-led GFG Alliance, to pay an outstanding of around `410 crore in two instalments by January 15. They had also turned down Liberty House’s condition that out of the total amount, it be allowed to deposit `100 crore — claimed by operational creditor MSTC — in an escrow account. The issue of state-run MSTC claiming around `100 crore is now pending for consideration before the National Company Law Appellate Tribunal (NCLAT).

In a statement issued on January 15, Liberty House Group (LHG) said the NCLAT had made MSTC a party to the case and listed the case for hearing on January 30. “LHG is confident of legal resolution and committed to implementing its resolution plan to ensure revival of the Adhunik Metaliks and Zion Steel business,” the statement said. The NCLT listed the matter for further hearing on February 12.

Earlier, aggrieved lenders moved the Kolkata bench of the NCLT after Liberty House had failed to make the upfront cash payment within the stipulated time for acquiring the steel company under the IBC. Following this, the international metals and industrial group had offered to pay `100 crore within 14 days and the balance `310 crore by January 15.

Lenders to AML 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.

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