The loss-making integrated textile company was was referred to the Ahmedabad bench of the National Company Law Tribunal (NCLT) on July 18, 2017. The NCLT has admitted claims worth Rs 29,615 crore from Alok Industries’ financial creditors, against their claims worth Rs 29,739 crore.
A Reliance Industries-JM Financial Asset Reconstruction Company combine is the sole bidder for the bankrupt Alok Industries. Sources familiar with the transaction indicated the resolution plan submitted by the team would require lenders to take a fairly big haircut of between 80% and 85%. Against outstandings of close to Rs 30,000 crore, the RIL-JM Financial combine is understood to have agreed to put in Rs 4,000-4,500 crore. However, it could not be confirmed whether the committee of creditors (comprising lenders to the beleaguered company) had taken a decision on the proposal. The loss-making integrated textile company was was referred to the Ahmedabad bench of the National Company Law Tribunal (NCLT) on July 18, 2017. The NCLT has admitted claims worth Rs 29,615 crore from Alok Industries’ financial creditors, against their claims worth Rs 29,739 crore. While State Bank of India is the lead bank in the consortium of lenders to Alok Industries, the other banks include Bank of Baroda, Bank of India, Axis Bank, Canara Bank and IDBI Bank.=
Alok Industries reported a net loss of Rs 3,083 crore In 2016-17 on revenues of Rs 8,913 crore. In January, the Ahmedabad bench of the NCLT had granted an extension of 90 days, beyond the initial 180 days, for the resolution process on the back of an application made by the resolution professional, Ajay Joshi. Alok Industries confirmed in a notification to stock exchanges on Thursday that only one bid had been received under the CIR (corporate insolvency process). Separately, RIL wrote to stock exchanges stating, “Our company evaluates various opportunities on an ongoing basis, and in this process, has submitted a bid jointly with JM Financial Asset Reconstruction Company for resolution of Alok Industries in terms of the Insolvency and Bankruptcy Code, 2016 (IBC). We are awaiting the outcome of the bid.”
The statement was issued in response to a query by the exchanges following a news report that claimed that the proposal of RIL-JM Financial combine had been accepted by the lenders. Alok Industries counts cotton yarn, apparel fabric, home textiles and polyester yarn as its core businesses. It has four manufacturing facilities in Silvassa, Vapi, Navi Mumbai and Bhiwandi, and it employs close to 18,000 people, information from its 2016-17 annual report showed.