Review sought on Liberty’s eligibility for Amtek bid

MUMBAI: Banks led by State Bank of India (SBI) will soon ask the resolution professional of Amtek Auto to review the eligibility of Liberty House, the highest bidder for auto component maker, said two senior officials who did not want to be named.

This comes in the backdrop of the resolution professional of bankrupt ABG Shipyard declaring a bid from Liberty House ineligible under Section 29(A) of the Insolvency and Bankruptcy Code.

A month ago, Dinkar Venkatasubramanian, the resolution professional of Amtek Auto, has declared Liberty House was eligible while early this week, Sundaresh Bhat, the resolution professional of ABG Shipyard has declared Liberty House as ineligible bidder Section 29(A) bars companies which have defaulted in one company from bidding for another company that is facing bankruptcy proceedings. Senior officials from banking circle said that Liberty House was deemed ineligible since it failed to clear dues of Exim Bank. ET could not independently verified if the dues were not cleared by Liberty House or by one of its associate firm. “A sum of $3 million is overdue to Exim Bank making it ineligible,” said a senior official who did not want to be named.

“If a bidder cannot be eligible for one company, how could it be eligible for another company is something that the resolution professional of Amtek Auto will have to explain,” said a bank official referring to the Amtek Auto – ABG Shipyard case.

Close to 98 per cent of the lenders had endorsed an offer made by Liberty House for Amtek Auto a fortnight ago.

The voting for ABG Shipyard did not take place since the sole bidder – Liberty House- was declared ineligible.

Senior officials said: “The Liberty offer for ABG Shipyard is too low and not many lenders were willing to endorse it. So anyway it would go for liquidation.”

Lenders have made a claim of Rs 18,245 crore against the shipping company. Among lenders, ICICI Bank has made the highest claim of Rs 4,877 crore on the company, followed by IDBI Bank at Rs 2,573 crore and State Bank of India at Rs 2,316 crore. Among foreign banks, Standard Chartered Bank has made a claim of Rs 563 crore.