Dibakar Yadav || New Delhi || 3rd May 2022
According to industry sources, creditors to Mumbai-based bankrupt truckmaker AMW Motors authorized a resolution plan by US electric vehicle company Triton EV by an overwhelming number in a vote concluded over the weekend.
Triton’s strategy was approved by a near-absolute majority (99.60 percent) of creditors led by IDBI Bank and Indian Overseas Bank, although with a substantial chop to total outstanding loans.
Triton has given creditors of AMW Motors Rs 210 crore in cash at a reduction of more than 94 percent to lenders with total acknowledged claims at Rs 3756 crore.
For more than six years, this credit account has been way overdue. It had been taken into bankruptcy proceedings in 2020 and was on the verge of being sold when this agreement was made.
Certainly, the haircut is hefty, but it is still a better deal than liquidation, which can take many months, if not years, with no assurance of return, a stakeholder in the process remarked.
In 2008, the Anirudh Bhuwalka-founded Asia Motor Works or AMW Motors began rolling out vehicles from its 50000-unit Bhuj facility. AMW started to rise through the ranks in a short period of time.
In FY-12, the company sold over 10,000 vehicles and held a 25% share of the market in the country’s rapidly growing tipper truck industry.
There were a few days when it was the third-largest manufacturer of medium and heavy trucks in the country. It was ahead of VE Commercial Vehicles during that time.
AMW Motors was derailed by a determination to expand the firm further, as well as a lengthy decline in economic activity between 2012 and 2015.
For a long time, the company struggled to get working cash to build trucks. Bhuwalka also sought assistance from a number of worldwide truck manufacturers, like Kamaz and Paccar, to enable him to get out of his predicament, but nothing came of it.
AMW lost Rs. 1268 crore in FY-19 on revenue of Rs. 44 crore in its final year of operations. According to statistics on the corporate affairs ministry website obtained via business information platform Tofler, the business has accrued losses of Rs 14292 crore on its books.
Triton’s offer, according to bankers, was the finest on the table for a struggling company. Despite the massive chop, the whole cash amount was also an encouragement to settle.
For the last six years, they had attempted numerous times to locate a bidder for this company, but nothing ever worked out.
The truth is that there was nothing else on the table, and if they wouldn’t have grabbed it, they wouldn’t have got anything else, another individual explained the reasoning behind the landslide victory on voting.
Bank of India, UCO Bank, Punjab National Bank, Central Bank of India, Bank of Baroda, and State Bank of India are among the other lenders to AMW Motors.
Triton EV, established in the United States, specialises in lithium battery cells, electric vehicle controllers, and long-range electric automobiles.
It signed an MoU with the Gujarat government earlier this month to invest over Rs 10,000 crore in electric truck production in the state over the next five years. It claims that the plant will employ 10,000 residents directly and indirectly.