There were three contingencies to the plan, according to DVI. A long-stop date saying that if the plan is not approved within a certain period of time (around six months) it becomes void. Then the land lease agreement for the main facility--which has around 45 per cent of production--had to be made proper as the lease was not valid. Third was the force majeure clause.
“All three events have happened. But bankers are accusing us of wriggling out and walking away, which is just not accurate. In fact, a strong case can be made that the banks are acting in bad faith,” said Bodas.
He said that the question of walking away and withdrawal did not apply. “All that we ask is treat us fairly and not act unilaterally when it is so patently apparent that the contract is void. We are willing to come to the table for discussion to have a win-win solution,” said Bodas.
The matter regarding the leased land is before the National Company Law Appellate Tribunal (NCLAT), as DVI has filed an appeal against the order by the National Company Law Tribunal (NCLT) approving the resolution plan in July.
The condition relating to land centres on a mortgaged property: the ACE Complex land. Amtek’s factories--five separate units that account for 45 per cent capacity--are on this land. However, there is a dispute between leaseholders, represented by Vistra ITCL (India), and creditors. Vistra ITCL has submitted an application seeking impleadment in the appeal before the NCLAT.
The lender and resolution professional signed a contract which was well negotiated and now they are trying to force the contract on us, saying those conditions don’t apply, Bodas.
“That is not how business works. If the banks had not agreed to the conditions, we would have walked away from this transaction. It’s fundamentally a flawed way of doing business with an honest party who has an impeccable track record of doing deals all over the world,” said Bodas.
DVI submitted its resolution plan in January after the corporate insolvency resolution process (CIRP) for Amtek was started afresh due to non-implementation of plan by Liberty House. Amtek was admitted to NCLT
Amtek owes lenders around Rs 12,500 crore and the DVI offer is understood to be Rs 2,700 crore of which Rs 500 crore is the upfront cash component, the balance Rs 2,200 crore would be paid from future cash flows.
Bodas said that DVI was ready to implement the plan. “We had actually signed a contract with a chief executive officer (CEO) to come and take over the company, we were ready.”
He also said that no information has been shared on Amtek since June. “We have made an assessment based on what we got in June. We wrote to the company several times, asking for information on performance in July, August and September. But they haven’t responded. That is not in the spirit of the law,” Bodas said.
DVI triggered force majeure as performance thresholds in the clause had been breached, which was based on the assessment made in June.
"I thought that the banks would accept that the contract is void, given that several conditions were not met, and then show us the numbers and we could talk about what to do."
“Instead, they are using the courts to see if they can get a judgment in their favour in a clearly void contract. We have full confidence in Indian courts and we will see what happens, but it’s tragic that large Indian banks are setting a precedent that they will not honour bilaterally negotiated contracts,” said Bodas.