Amtek Auto hits 5% upper circuit limit as Liberty House leads bid process

NEW DELHI: Amtek Auto hit its upper circuit limit of 5 per cent on Friday after a report suggested that Liberty House, a UK-based metal group, and Deccan Value Investors, a US-registered hedge fund, have emerged as top contenders for the auto component maker.

Amtek Auto is awaiting resolution in bankruptcy courts.

Following the development, the stock went through the roof to Rs 29.40 on the BSE, eventually closing at Rs 29.40, up 5 per cent.


“The company has received binding bids from the two entities about 10-12 days ago. But both the applicants did not submit bid bond guarantee,” one of the officials told ET.

“Therefore, they were given additional time till January 9 to submit the resolution plan with bid bond guarantee.”

The company has seen erosion of over 80 per cent in its market value over the last three years as the auto component maker faces claims to the tune of Rs 12,722 crore from financial creditors and Rs 223 crore from operational creditors.

That said, the scrip jumped 29 per cent in the last one quarter. A committee of creditors will meet next week to evaluate the two bids.

A resolution plan for a company facing bankruptcy proceedings will not be considered by lenders if the applicant does not provide bid bond guarantee, which is a letter of comfort from a bank or a bank guarantee that indicates that the bidder has either the cash balance to complete the transaction or the banks would step in, ET reported. Corporation Bank had referred Amtek Auto to the NCLT.