State Bank of India (SBI), the lead bank, initiated bankruptcy proceedings in the Mumbai bench of the National Company Law Tribunal (NCLT).
MUMBAI: Castex Technologies, a subsidiary of automotive component maker Amtek Auto with debt of over Rs 6,000 crore, has been admitted to bankruptcy court.
State Bank of India (SBI), the lead bank, initiated bankruptcy proceedings in the Mumbai bench of the National Company Law Tribunal (NCLT).
Castex Technologies, a provider of iron cast auto components, is among 29 companies listed by the Reserve Bank of India that were required to be restructured by banks before December 13, failing which they would have to be referred to bankruptcy court by December 31.
Parent company Amtex Auto was also admitted to bankruptcy court following the RBI’s directions.
The NCLT admitted Castex Technologies for corporate insolvency resolution process on December 20 and appointed Dinkar T Venkatasubramanian as the interim resolution professional. Venkatasubramanian, who is a partner at consulting firm EY, is also the resolution professional for Amtek Auto.
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State Bank of India had granted loans totalling Rs 1,191 crore to Castex Technologies. The company had defaulted on Rs 572 crore as of October 9, 2017, the bank informed the court. The bank had attempted to revive the company by putting in place a corrective action plan in March 2016. As per the restructuring package, a joint lenders forum provided Rs 1,667.5 crore for capital expenditure, to shore up the company’s net worth and to refinance a term loan amounting to Rs 920.8 crore.
NCLT, while admitting Castex Technologies, pointed out that even after granting sufficient time, the corporate debtor had not replied or objected to the notice issued by the lender.
New Delhi-based Castex Technologies, which has plants in Haryana, Himachal Pradesh and Rajasthan, reported a loss of Rs 1,044 crore in 2016-17 and a loss of Rs 171crore a year earlier.
Shares of the company rose 13% to Rs 6 at the close on the BSE on Wednesday. Promoter Arvind Dham, who had given a personal guarantee on the loan, has a 46% stake in Castex Technologies.
