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Liberty House told to give details on Adhunik, Zion resolution plan

Liberty House told to give details on Adhunik, Zion resolution plan

New Delhi: An appellate tribunal has directed the Liberty House Group to file an affidavit outlining the implementation of its Rs 460 crore resolution plan for Adhunik Metaliks and Zion Steel, giving the UK-based company one more chance after it failed to make full upfront payment for the two entities in time.

“Counsel for the appellant (Liberty House) is allowed to submit an affidavit showing its unconditional and unqualified proposal giving time frame for implementation of the resolution plan,” ordered a two-member bench led by Justice SJ Mukhopadhaya.

The bench asked the group to file an affidavit stating that it was willing to deposit Rs 410 crore as the remainder of the upfront payment due to the committee of creditors, as well as an additional Rs 10 crore in lieu of the delay in payment. It has already paid Rs 50 crore of the Rs 460 crore upfront payment agreed to creditors.

The Cuttack bench of National Company Law Tribunal had passed liquidation orders for the two companies after Liberty House failed to meet the deadline for the upfront payment. The National Company Law Appellate Tribunal stayed the liquidation orders in July, following an appeal by Liberty House. The two companies have total outstanding debt of more than Rs 5,000 crore.

Adhunik Metaliks’ integrated steel plant in Odisha has a capacity of 0.45 million tonnes, which can be increased to 1million tonne. Zion Steel has a 0.12-million tonne rolling mill. Counsel for the committee of creditors of Adhunik Metaliks and Zion Steel had opposed Liberty House’s appeal, stating that it had no intention to make the payment. “This is the persistent submission that they have been making since September 2018, for a period of 16 months and to every forum in the country. They have been saying that they are ready to give the money. There is no money coming from them,” said the counsel for the CoC.

Liberty House had also failed to make payment for Amtek Auto after its Rs 3,225 crore resolution plan was approved. Amtek Auto was one of the 12 large bad-loan accounts that the Reserve Bank of India had initially referred for resolution under the Insolvency and Bankruptcy Code.

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