Lenders to Mumbai-based bankrupt truck maker AMW Motors have encashed the bank guarantee issued by US-based electric vehicle manufacturer Triton EV after it failed to pay up its promised amount to take over the distressed company.
Triton had offered Rs 210 crore in cash to creditors of AMW Motors at more-than-94% haircut to lenders that have admitted claims of Rs 3,756 crore. The NCLT had approved the plan in December giving Triton 45 days to complete the transaction. However, Triton failed to make the payment in the stipulated time as a result of which the guarantee was invoked, people familiar with the matter said.
“Triton was given time until February 6 according to law to fulfil its obligations. But the company delayed the payment citing frivolous reasons. Lenders were hoping that they will make the payment until the last day but that did not happen. Triton in fact asked for a couple of months more, so the resolution professional in consultation decided to nullify the agreement and invoke the Rs 30 crore bank guarantee,” said a person involved in the negotiations. The guarantee amount has already been distributed to creditors, this person said.
Triton founder Himanshu Patel did not reply to an email seeking comment.
The resolution professional will now file a status report on the reasons for not implementing the resolution plan. Lenders also plan to file a complaint with the Insolvency and Bankruptcy Board of India (IBBI) regarding Triton to prevent the company from participating in such bidding processes in the future.
For the defunct AMW Motors, the failure of this resolution plan means an impending liquidation as finding another buyer could be difficult, lenders said.
IDBI Bank, with 24% or Rs 901 crore of dues from AMW, is the bank with the highest exposure followed by Indian Overseas Bank with Rs 694 crore of loans due constituting 18.50% of total dues.
AMW has been classified by banks as an NPA for close to seven years. It was taken to the bankruptcy court in 2020 and was just about to be liquidated when the Triton offer came.
The Anirudh Bhuwalka promoted company Asia Motor Works or AMW Motors first rolled out trucks from its 50000 units factory in Bhuj in 2008.
At its peak, the company sold over 10000 trucks in fiscal 2012 and had grabbed 25% market share in the growing tipper truck segment in the country. It was hit by a prolonged downcycle in the economy between 2012-2015.
Other lenders to AMW Motors include Bank of India, Central Bank of India, UCO Bank, Punjab National Bank, Bank of Baroda and State Bank of India.
US based Triton EV specialises in manufacturing lithium battery cells and electric vehicle controllers in addition to long range electric vehicles. The company manufactures electric SUVs, sedans, semi-trucks, rickshaws and defence EVs in the US, according to the company website.
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