Shree Veerakumar Fibre acquires Uthara Fashion Knitwear for Rs 26 cr
Uthara Fashion Knitwear Limited, a Tamil Nadu-based textile company with over 30 years of experience, has been acquired by Shree Veerakumar Fibre through a resolution plan valued at Rs. 25.6 crore. The Chennai bench of the NCLT approved the resolution plan submitted by Shree Veerakumar Fibre in an order dated 22 March 2024.
As per the resolution plan, secured financial creditors would receive a sum of Rs 25.16 crore against their admitted claims of Rs 133 crore. The resolution plan also provides for 100% of the admitted statutory dues (Rs 43.32 lakh).
Uthara Fashion Knitwear Limited faced insolvency proceedings initiated in 2019 by Stressed Assets Stabilization Fund (SASF) after it failed to pay Rs 76 crore. Thilagar Murugesan was appointed as the ‘Interim Resolution Professional. Later, Chandrasekhar Sagutoor was appointed as the Resolution Professional vide order dated 17 October 2022.
As per the resolution plan, all the existing shares of Uthara Fashion Knitwear Limited will stand cancelled and fresh equity shares will be issued. The existing shareholders are not entitled to any payment and all their rights will stand extinguished as on date of approval of the resolution plan. As many as 20,00,000 fresh equity shares at a face value of Rs. 10 each of the Corporate Debtor will be issued to the resolution applicant.
Uthara Fashion Knitwear Limited’s fair value is estimated at Rs. 16.28 crore, while its liquidation value is Rs. 11.69 crore.
Shree Veerakumar Fibre, the successful bidder, has a proven track record in manufacturing coconut-based products like copra, husk, fiber, and oil.
The Resolution Applicant has a healthy balance sheet and net worth that allows him to implement a Resolution Plan effectively and efficiently. The Resolution Applicant is interested in reviving the Corporate by taking over its assets and extinguishing its liabilities entirely. Upon takeover of the Corporate Debtor, the Resolution Applicant will run the Corporate Debtor on a going concern basis or otherwise, in accordance with section 5(26) of the Code.
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