Premier Ltd, known for manufacturing Premier Padmini cars popular in pre-liberalisation days, will soon be acquired by Chennai-based Fab Metals Pvt Ltd under the insolvency process, according to a disclosure made to the stock exchange.
Lenders would recover about one-fifth of their dues following the sale of the company, people aware of the matter said. Nearly 92% of the lenders by value voted in favour of Fab Metal’s plan early this week.
The engineering company has proposed to make payments to lenders within 90 days of the plan being approved by the National Company Law Tribunal (NCLT), the people said.
The resolution professional, Kanak Jani received seven proposals last month. These included offers from Shanti GD Ispat & Power Private Ltd, Sadhana Nitro Chem Ltd, Bommidala Enterprises Pvt Ltd, Palika Towns LLP, Runwal Developers Pvt Ltd, Fab Metals Pvt Ltd, and Fortuna Engi Tech and Structurals (India) Pvt Ltd, according to a stock exchange disclosure.
Since all the applicants were eligible bidders, the RP had put all of them for vote early this week. Fab Metals offer was highest at around Rs 100 crore, one of the persons said.
The RP has admitted total claims of Rs 502 crore from financial creditors, including Rs 450 crore from Edelweiss Assets Reconstructions, the only secured lender among 14 lenders, according to the company’s website.
Premier Ltd manufactured Premier Padmini cars in partnership with Fiat between 1964 to 2000. Named after a 14th century Rajput princess, it was among the top three carmakers during the licence raj era in India. The other two were Hindustan Motors’ Ambassador and Maruti 800.
However, post liberalisation it lost its popularity when several foreign carmakers made inroads by setting up manufacturing bases in India. Eventually it was confined to being a local black and yellow taxi on streets of Mumbai in early 2000.
However, in mid-2013, it suffered another setback when under the new pollution norms Maharashtra government prohibited 20-year-old cars from plying on the roads.
Premier has a 27-acre manufacturing plant to undertake automotive and engineering business at Chinchwad in Pune. The engineering segment has two activities – CNC machine division and engineering. The automotive segment consists of light utility vehicles and sports utility vehicles, according to the company website.