The Supreme Court has given US hedge fund Deccan Value Investors (DVIL) 24 hours to make its Rs 500 crore cash payment to complete its Rs 2700 crore takeover of bankrupt auto parts maker Amtek Auto.
In an order today, a bench of Justices MR Shah and Sanjiv Khanna said DVIL has to transfer the amount into a State Bank of India account by November 24, bringing the more-than-4-year old resolution saga to its climax. In its submission to the court on November 18, DVIL said that Rs 500 crore is lying in a deposit account in India with their custodian Standard Chartered Bank and the money is ready for disbursement to lenders. However, the hedge fund argued that some steps of the resolution plan like documentation and taking regulatory approval is yet to be completed.
Lenders were represented by solicitor general Tushar Mehta, among others. The next hearing for the case is slated for November 25 . Bankers are hoping that the more than four-year-old resolution for Amtek will now finally come to a close. Amtek was among the 12 debt-laden companies taken to the NCLT on the directions of the Reserve Bank of India (RBI) in 2017. Although the recovery is close to the liquidation value, the culmination of this deal removes a legacy asset from the resolution process.
DVIL was selected in a second bid process to find a buyer for the company after the previous winner, UK-based Liberty House, failed to make the payment in July 2018. In February 2020, Lenders led by IDBI Bank and State Bank of India (SBI) agreed to a Rs 2700 crore offer from the US-based investor, a 79% haircut on Rs 12,700 crore of dues owed by Amtek. Only 4% of the recovery is through cash at Rs 500 crore. DVIL has already submitted a Rs 300 crore bank guarantee to lenders out of which Rs 150 crore has already been invoked by banks frustrated by the delays. Bankers said they need to see the full Rs 500 crore in the account to complete the deal.