NCLT clears Rs 5,000 crore plan of RIL-JM Fin ARC for Alok Industries

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Published: March 9, 2019 4:57:45 AM

The Ahmedabad bench of the National Company Law Tribunal (NCLT) on Friday approved a Rs 5,000-crore resolution plan of Reliance Industries-JM Financial Asset Reconstruction Co to acquire Alok Industries.

AIL is one of the top 12 loan default cases under the Insolvency and Bankruptcy Code, 2016.

Under the new Insolvency and Bankruptcy Law, the Ahmedabad bench of the National Company Law Tribunal (NCLT) on Friday approved a Rs 5,000-crore resolution plan of Reliance Industries-JM Financial Asset Reconstruction Co to acquire Alok Industries.

The two-member bench of Justices Harihar Prakash Chaturvedi and Manoram Kumari approved the resolution plan submitted by the resolution professional for Alok Industries (AIL). The tribunal initiated the insolvency resolution process against the company in July 2017 on a plea filed by State Bank of India.

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AIL is one of the top 12 loan default cases under the Insolvency and Bankruptcy Code, 2016. The cases under insolvency law are expected to be resolved within a 270-day period.

The company faced liquidation in April 2018 as the resolution plan had failed to meet the 75% threshold in the first round of bidding, with only 72% financial lenders approving Reliance Industries-JM Financial resolution plan.

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Later on, the NCLT allowed the second round of bidding as the threshold under the Insolvency and Bankruptcy Code (IBC) later brought down to 66%.
The resolution plan of Reliance Industries was stated to be near the liquidation value of nearly Rs 4,500 crore. With this development, Reliance Industries-JM Financial is set to acquire four manufacturing facilities in Silvassa, Vapi, Navi Mumbai and Bhiwandi, which can manufacture 68,000 tn of cotton yarn a year and 170,000 tn of polyester per year.

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