LML to shut down after it fails to resolve insolvency

In September 2017, LML had announced that it would lay off its workforce and suspend operations. In a recent development, the Kanpur-based 2-wheeler maker has decided to shut down its operations completely.

Bankers have rejected a resolution plan for the company after its top bidder Rimjhim Ispat offered a very low amount. Ispat offered Rs. 270 crore which was about Rs. 100 crore less than the liquidation value. Other bidders included Lohia Group, Panem Steel, Neil Industries and a joint offer by Dolphin Developers and Mohani Teal.

LML used to employ around 2,000 people. The company has a total debt of around Rs. 243 crore, while lenders and employees have claimed about Rs. 500 crore. Its lenders include the State Bank of India (SBI), Edelweiss, Asset Reconstruction Company, Bank of India and the Stressed Assets Stabilization Fund (SASF).

Having passed the final deadline to resolve the insolvency, a liquidation application will now be filed with the Allahabad National Company Law Board. Earlier, the company had moved the National Company Law Tribunal (NCLT) for admission under the Insolvency and Bankruptcy code.

Source: The Economic Times