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Reliance Industries could be looking at buying the polyester yarn unit of bankruptcy-hit textile manufacturer Alok Industries Ltd, sources close to the development have stated.

 

Alok Industries is one of 12 large accounts identified by the Reserve Bank of India in June for bankruptcy proceedings after having defaulted on loans.

 

It is a fully integrated textile unit with four core divisions, namely cotton yarn, apparel fabric, home textile and polyester yarn.

 

After defaulting on more than Rs 20,000 crore of loans, the company is presently managed by insolvency professional Ajay Joshi.

 

According to sources, discussions are on with the promoters of Alok Industries and Joshi.

 

Joshi had invited bids for Alok’s assets from applicants with a minimum net worth of Rs 500 crore and assets under management of Rs 3,000 crore. October 12 was the last day for the bids.

 

Alok’s lenders had attempted to revive the company through a strategic debt restructuring (SDR) scheme, but it got stuck after an order by the Bombay High Court that stayed the sale of assets and a change in the company’s equity structure.

 

Alok Industries was admitted by the National Company Law Tribunal’s Ahmedabad bench on July 19, which gives its lenders and promoters, the Jiwrajka family, time until the middle of January to arrive at a resolution plan.

 

They will get another 90 days to come up with a workable scheme, failing which the assets of the company will be liquidated. The company posted a loss of Rs 3,502 crore on revenue of Rs 8,326 crore in the year ended March. 

Source : Textile Excellence

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