Despite repeated defaults to honour its commitments, Liberty House of UK has been given a second chance to claim control over Adhunik Metaliks.
Effort by State Bank of India-led Committee of Creditors to restart the resolution process all over again following Liberty House's alleged breach of contract has been turned down and the process adviser Grant Thornton has been asked to look after the assets. The creditors, however, have not been stopped from negotiating with second-highest bidder Maharashtra Seamless.
"In view of the matter it appears to me that question of revival of CIRP (Corporate Insolvency Resolution Process) can't be entertained by me at this stage. So an interim order as prayed can't be passed in the case in hand. No prima facie case has been established on the side of the applicant," Judge K R Jinan said while rejecting the application of Committee of Creditors.
State Bank of India, representing the CoC, had demanded "revision of CIRP process for enabling it to have negotiations with H2 bidder (Maharashtra Seamless) who is willing to proceed with the process offering a proposal for takeover the assets of the corporate debtor".
The CoC's prayer has been rejected as the National Company Law Tribunal (NCLT) did not find merit in reversing the process and consultancy firm Grant Thornton has been asked to manage the affairs of the company as per the terms of the resolution plan approved by the bankers till a new owner takes it over.
"Continuing litigation in between the resolution applicant (Liberty House) and the CoC is not a ground to appoint a Resolution Professional to take over the management of the affairs of the corporate debtor. The managing agency can very well do the operations, subject to the satisfaction of the monitoring committee," the Judge said.
The monitoring committee consists of three members of the financial institutions and three members of Liberty House.
Trouble started after Liberty House refused to pay up despite emerging as the preferred bidder for Adhunik Metaliks by its lenders way back in July 2018.
It hasn't paid any money despite repeated pleas by the CoC and directives from the NCLT, following which the lenders threatened move to liquidate the company, an option which hasn't been supported by the court.
Liberty House, on its part, has argued that there is a pending demand for Rs 100 crore by operational creditor MSTC before the appellate tribunal.
If that claim is accepted, it has to be paid by Liberty thereby raising its financial commitment.
MELTING OFFERS
- Rs 12,515 cr – Liberty House was to pay for buying four NCLT firms -- ABG, Amtek Auto, Adhunik, Castex
- Rs 44,314 cr – Combined debt of the four ailing companies in India for which Liberty House has bid
THE OFFER BY LIBERTY HOUSE
- Rs 5,200 cr – for ABG Shipyard
- Rs 4,810 cr – Amtek Auto and Adhunik Metaliks
- Rs 2,505 cr – Castex Technologies
- Rs 100 cr – Demand by creditor MSTC of Adhunik
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