Casting doubts over the ability of Liberty House to meet its commitments under resolution plans for Adhunik Metaliks and Amtek Auto, the Committee of Creditors led by ICICI Bank is said to have rejected the resolution plan submitted by the London-based Group for debt-laden shipbuilder ABG Shipyard Ltd.
The committee of creditors is said to have rejected the resolution plan submitted by Liberty House for ABG Shipyard through an electronic voting on December 18 and recommended liquidation of the shipyard, a person briefed on the voting said, asking not to be named.
Liberty Group may move NCLT
Liberty Group is looking to appeal the CoC decision in the National Company Law Tribunal (NCLT), arguing that its bid was more than the liquidation value of Rs 2,200 crore set by the lenders, the person said.
Liberty has sought more time to make upfront payments it had committed under the resolution plans for Adhunik Metaliks and Amtek Auto.
“Lenders don’t trust Liberty anymore after it failed to honour the commitments made under resolution plans for Adhunik Metaliks and Amtek Auto”, the person said.
Sundaresh Bhat, the resolution professional for ABG Shipyard, did not respond to calls made to his mobile phone seeking comment.
The CoC’s decision to hold an electronic voting on the resolution plan submitted by Liberty and reject it comes ahead of a hearing of the National Company Law Tribunal (NCLT) on January 19 on the case.
In an interim order earlier, the NCLT had directed the resolution professional for ABG Shipyard to consider the bid placed by Liberty Group in the second round of bidding for the debt-laden shipbuilder.
The interim order of NCLT came on a petition brought by the London-based metals group seeking to overturn its disqualification from the second round of bidding for ABG Shipyard in April under Section 29 (a) of the Insolvency and Bankruptcy Code (IBC).
Liberty offered Rs 5,200 crore on a deferred payment basis stretching over 5-10 years. The bid also included an upfront amount of Rs 400 crore and issue of debentures.
The business plan submitted by Liberty includes completing the pending ship orders and then pursuing a combination of shipbuilding and ship-breaking business. It also includes setting up a steel rolling mill inside the yard to make steel using materials generated from dismantling of ships.
ABG Shipyard is among the list of 12 large companies that the Reserve Bank of India (RBI) had identified in June 2017 for banks to refer to the bankruptcy court.
The resolution of ABG Shipyard was to be completed by April 28 according to the timeline set by NCLT, which was set up to oversee the bankruptcy law aimed at fixing the country’s mounting bad bank loans. The timeline has since been extended.
The lenders have set a liquidation value of Rs 2,200 crore for the yard that owes some Rs 18,245 crore to a clutch of banks led by ICICI Bank.
Liberty Group led by Indian-born businessman Sanjeev Gupta was the only bidder for ABG in three rounds of bidding.