The bankruptcy court has approved Kolkata-based Ramkrishna Forgings’ bid to acquire Amtek Group’s listed subsidiary JMT Auto through the corporate insolvency resolution process.
Ramkrishna Forgings, also a listed firm, has agreed to offer ₹125 crore to acquire JMT Auto against its admitted financial liabilities of over ₹165 crore.
“It is seen from the record that there is no application moved by any person objecting to the resolution plan,” said a division bench of judicial member Ashok Kumar Bhardwaj and technical member LN Gupta, in its August 21 order. “Further, during the hearing, the resolution plan was not objected to by any of the stakeholders. Hence, we find no impediment in proceeding ahead with the matter.”
The country’s third largest private sector lender, Axis Bank, had approached the New Delhi bench of the National Company Law Tribunal (NCLT) after JMT Auto defaulted on its dues of over ₹52 crore. Last February, the tribunal admitted the company and appointed Pardeep Kumar Sethi its resolution professional (RP). Before the tribunal’s nod, the lenders of the company had approved the resolution plan with 84.6% votes in favour of Ramkrishna Forgings.
“The manufacturing industry is an asset-heavy industry and, thus, the Code helps in the productive utilisation of the already deployed capital and assets created. With ‘Make in India’ and incentives for manufacturing sectors, we see a positive spree in acquisition in this space,” said L Badri Narayanan, executive partner at Lakshmikumaran & Sridharan Attorneys. “We expect more acquisitions in the manufacturing sector through IBC.”
Originally, the RP had received interest from 7 bidders. However, only two bidders submitted their revival plans for JMT Auto: RKG Fund-I being the other bidder.
The tribunal noted in its order that JMT Auto’s fair market value was about ₹144 crore and liquidation value stood at about ₹105 crore. The successful bidder has agreed to pay ₹125 crore, which is over 50% of the total amount claimed by various stakeholders. The tribunal, in its order, also noted that listed Ramkrishna Forgings is a financially sound company with a networth of ₹1,094 crore in FY22.
Amtek Group owes about ₹15,000 crore to lenders and was among the 12 debt-laden companies initially taken into the NCLT as per the Reserve Bank of India’s direction in 2017. Subsequently, in 2020, lenders to the group approved a composite revival plan for its flagship firm Amtek Auto and Castex Technologies, submitted by US-based hedge fund Deccan Value Investors for about ₹2,700 crore.
