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Insolvency professional seeks cooperation to keep Amtek Auto’s operations on going

LiveMint logoLiveMint 16-08-2017 Alekh Archana

Mumbai: The insolvency professional in charge of Amtek Auto Ltd has sought the cooperation of all creditors to keep the company as a “going concern” for a time-bound resolution and in order to maximise the value of the company.

The Chandigarh bench of National Company Law Tribunal (NCLT) admitted Corporation Bank’s insolvency proceeding against Amtek Auto on 24 July and subsequently appointed Dinkar Venkatasubramanian as the insolvency resolution professional (IRP).

According to the Insolvency & Bankruptcy Code (IBC), 2016, upon admission, the board of the company is suspended and IRP is responsible for daily management of the company.

“In terms of mandate under Section 20 of the IBC, I am required to make every endeavor to protect and preserve the value of the property and manage the operations of the corporate debtor as going concern during the CIRP (corporate insolvency resolution process),” he said in an exchange filing.

Venkatasubramanian has asked creditors which are not paid before the date of acceptance of the insolvency proceedings, to claim their dues in a prescribed format as per IBC.

He has also requested exchanges not to initiate action such as delisting shares of Amtek Auto during the resolution process.

IRP has to come up with a resolution plan within 180 days, extendable by another 90 days, of the admission of the petition. In case the account is not resolved, the company goes into liquidation.

Amtek Auto is among 12 large borrowers identified by the Reserve Bank of India where banks were directed to initiate insolvency proceedings. Except Era Infra Engineering Ltd, various benches have accepted cases against all other borrowers.

Venkatasubramanian also said that after studying the records of the company, it appeared to him that Amtek Auto has been operating at a low capacity utilisation level and there is an immediate need for working capital.

The company’s problems began after it defaulted on bond repayments of close to Rs800 crore in September 2015. Since then, it has been trying to sell various group businesses to reduce the debt on its books.

As on 31 March, 2017, consolidated debt of Amtek Auto stood at over Rs3,900 crore.

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