Premier, maker of the iconic Fiat Padmini, stares at bankruptcy
In a recent filing to the exchanges, the company said Corporation Bank approached the NCLT to recover dues worth Rs 51.99 crore.
December 13, 2018 / 12:49 PM IST
Premier, the company that produced the famous sedan Premier Padmini modelled on the Fiat 1100, is now facing bankruptcy.
In a recent filing to the exchanges, the company said Corporation Bank approached the Mumbai bench of the National Company Law Tribunal (NCLT) to recover dues worth Rs 51.99 crore (including principal amount of Rs 31.17 crore).
Under India's recently-instituted Insolvency and Bankruptcy Law, the NCLT decides the fate of companies that have been referred for recovery of dues. Options include liquidation of the company.
Premier also said that it is talking to Corporation Bank and that the bank has indicated that it is open to amicably settling the issue outside the court.
In the past two decades, Premier ventured into engineering, but could not sustain its business.
"The company has initiated steps to monetise its land assets in order to reduce its debt and is hopeful of completing the same by the end of the current financial year. It is also in talks with Edelweiss Asset Reconstruction Co, its majority secured debt holder, for a comprehensive restructuring plan," Premier said.
Premier was started in 1952, then called Premier Automobiles Ltd (PAL), and signed an agreement to make a version of Fiat 1100 in India.
The Premier Padmini dominated Indian roads for decades, before the Maruti 800 overtook it.
The Padmini later became popular as a taxi car, mainly making up the fleet for Mumbai's iconic kaali-peeli cabs.
In 2009, the Bombay High Court ruled that taxis older than 25 years would be taken off the roads.
Premier posted a loss of about Rs 124 crore on revenues of Rs 20.1 crore in the last fiscal. It had a debt of Rs 375 crore.