Lenders receive money for Alok Industries resolution from RIL and JMFARC

Published: April 28, 2020 8:02:03 AM

Alok Industries posted a net loss of Rs 189 crore in the December quarter, compared to loss of Rs 1,259 crore in the same quarter last year.

Alok industries, reliance indurstries, jm financial asset reconstruction company, national company law tribunal, alok industries resolution, alok industries settlementAlok Industries was part of the first twelve accounts, released by Reserve Bank of India for insolvency proceedings in June 2017.

By Ankur Mishra

A year after the National Company Law Tribunal (NCLT) approved the resolution for Alok Industries, the lenders of troubled textile manufacturer have finally received Rs 5,052 crore last month from Reliance Industries (RIL) and JM Financial Asset Reconstruction Company (JMFARC), as part of resolution plan, sources in the know told FE.

This development assumes significance as banks will be able to write back the transferred amount completely in March quarter, as they had already provided 100% for the troubled company. According to sources, the lead creditor, State Bank of India (SBI) will write back Rs 1,660 crore in the March quarter after receiving money for Alok Industries. The Ahmedabad bench of NCLT had approved the joint bid by RIL and JMFARC in March, 2019.

Alok Industries was part of the first twelve accounts, released by Reserve Bank of India for insolvency proceedings in June 2017. The firm owed lenders a total of Rs 30,000 crore. The total bid of Rs 5,052 crore by RIL and JMARC implied around 85% haircut for the lenders.

Apart from SBI, other lenders included IDBI Bank, Bank of Baroda, Canara Bank and Bank of India, among others. RIL has also bought 37.7% in textile manufacturer Alok Industries for Rs 250 crore, as part of resolution plan. RIL and SBI did not respond to the queries sent by FE till the time of filing this copy.

Alok Industries posted a net loss of Rs 189 crore in the December quarter, compared to loss of Rs 1,259 crore in the same quarter last year. The total income of the company in December quarter stood at Rs 827 crore, compared to the same quarter last year. The firm is an integrated textile manufacturer headquartered in Mumbai with interests in the polyester and cotton segments. Alok Industries had informed exchanges earlier that it had shut its manufacturing units and offices from March 25, 2020 due to Covid-19.

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