NCLT approves Rs 3,651-crore joint bid by Reliance Industries, ACRE for Sintex Industries

The Ahmedabad bench of the National Company Law Tribunal (NCLT) has approved the Rs 3,651-crore resolution plan submitted jointly by Reliance Industries Limited and Assets Care & Reconstruction Enterprise Limited (ACRE), with respect to the corporate insolvency resolution process of Sintex Industries Limited under section 31 of the Insolvency and Bankruptcy Code, 2016.

The company in an exchange filing informed that the approval of resolution plan contains the reduction of share capital and delisting of equity shares with nil value. Apart from Rs 3,651 crore offered to the lenders, the consortium of Reliance Industries Limited and Assets Care & Reconstruction Enterprise Limited is also offering 15% equity to verified lenders.

Earlier last year, Committee of Creditors of Sintex Industries last year had approved with 100% vote the resolution plan submitted by RIL jointly with Assets Care & Reconstruction Enterprise Limited.

Apart from Reliance Industries jointly with Assets Care & Reconstruction Enterprise, three more bidders had bid for Sintex Industries.  They were Easygo Textiles Private Limited (WELSPUN Group), GHCL Limited and Himatsingka Ventures Private Limited, and Shrikant Himatsingka and Dinesh Kumar Himatsingka.

Sintex Industries owed Rs 7,719 crore to financial creditors and Rs 85 crore to operational creditors including workers and employees. PNB with Rs 1,563 crore had the highest exposure in the company followed by Bank of Baroda with an exposure of Rs 1,169 crore.

The details of the approved resolution plan are yet to be known.

The Ahmedabad bench of the National Company Law Tribunal through an order on 6 April 2021 admitted insolvency application of Invesco Mutual Fund after the tribunal found that all the documents furnished by the financial creditor (Invesco Mutual Fund) established the debt and default on part of Sintex Industries.

Sintex Industries is an eight-decade old company which is into manufacturing of textiles and yarns. It is listed on both National Stock Exchange and Bombay Stock Exchange.

Also see: Reliance Industries emerges successful bidder for textile company Sintex Industries