by Editor News
With a major decline of the automobile sector in India, the lenders of the auto component maker Auto Amtek are finding it hard to search for a new suitor after the initiation of the resolution process prior month after the orders from the Supreme Court.
Even after the consistent demand for the asset, the present downfall of the automobile sector is refraining the interested buyers to engage in the process claimed a person closely related to the resolution process. The total debt to be given to the lenders by the company is 12,000 crore. In July 2017, it was admitted for the insolvency resolution and became one of the 12 assets that were listed by the Reserve Bank of India for the immediate resolution. Some major companies like KKR, Deccan Value Investors of the US and Bharat Forge has shown interest prior to the auto sector breakdown last year when the auto industry had consistent growth.
The depreciation of the auto component industry has reached 21 per cent in the first four months of fiscal. A total of around 2 billion worth of investment was left pending by the industry that was planned for this year. Subrata Ray, head of corporate sector ratings at ICRA, said in a report that “Most players are taking a relook at their capital expenditure plans; consequently, across segments, ICRA estimates a cut back ranging between 15-25% by most players”. Even the reviews given by the ICRA changed its outlook to 'negative' on the auto component.
The resolution process has crossed its deadline by 270 days as it was abruptly left by the winning bidder Liberty House and has refused to pay the sum due to the contrasting realities in the information of the actual due process from the existing reality in the ground. The resolution professional Dinkar Venkatasubhramanyam of EY has been appointed by the Supreme Court to do the task and get fresh bids in a span of 21 days and another two weeks to complete the process.
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