The lenders of heavily indebted textile manufacturer Sintex Industries have approved a joint bid by Reliance Industries and Assets Care & Reconstruction Enterprise (ACRE) to acquire the company as part of bankruptcy proceedings.
Sintex Industries’ Creditors’ Committee (CoC) has voted unanimously in favor of Reliance Industries and ACRE’s resolution plan, according to a regulatory filing published on Sunday.
“The electronic vote on approval of the resolution plan was completed at 10 p.m. on March 19, 2022, and that of Reliance Industries Ltd. Resolution plan submitted jointly with ACRE has been duly approved by the 100% Chain of Custody Members,” the filing reads.
Sintex Industries has also received offers from Welspun Group’s Easygo Textiles, GHCL and Himatsingka Ventures along with Shrikant Himatsingka and Dinesh Kumar Himatsingka and have been submitted to the CoC for consideration during the voting process.
Although Sintex Industries has not disclosed the amount of RIL and ACRE’s joint bids in the regulatory filings, some reports have claimed the amount is around ₹3,000 crore and lenders have applied a discount of more than 50%.
The joint resolution plan of RIL and ACRE has proposed that “the existing share capital of the company will be reduced to zero and the company will be delisted from the stock exchanges ie BSE and NSE”.
The insolvency proceedings against Sintex Industries were initiated in April last year. Claims of approximately ₹7,500 crore have been admitted against the company. Under the procedures under the Insolvency and Bankruptcy Act, the Chain of Custody must approve an offer by a majority of at least 66 percent before it goes to the NCLT for final approval. Sintex Industries revenue was £1,689.15 billion in FY20-21.
For the October-December quarter, it had reported an 80 percent increase in consolidated operating income from ₹523.66 billion to ₹942.66 billion a year earlier.
It had also reported that it reduced its net loss of $214.99 billion.