RIL-JM Financial ARC's bid for Alok Industries fails to get lender's nod
16 April 2018
Creditors have not approved a debt resolution plan submitted by Reliance Industries Ltd and JM Financial Asset Reconstruction for textile company Alok Industries Ltd, which is undergoing insolvency proceedings, within the stipulated 270 days.
With the expiry of the deadline for the insolvency resolution on 14 April, the committee of creditors hasn’t approved any resolution plans within the 270-day deadline prescribed under the Insolvency and Bankruptcy Code, Alok Industries stated in a stock-exchange filing today.
"The corporate insolvency process for the company expired on April 14, 2018 and the resolution professional has not received the approval of the CoC for resolution plans within the time period prescribed under the IBC, 2016," it said in its BSE filing.
While the joint bid from Reliance Industries Ltd and JM Financial Asset Reconstruction Co Ltd was received just ahead of the insolvency resolution deadline, it is not clear if Alok’s creditors have rejected the joint bid.
Under the Insolvency and Bankruptcy Code, 2016, companies undergoing insolvency proceedings at the National Company Law Tribunal (NCLT) have a total of 270 days to evaluate and finalise on a resolution plan.
If the creditors fail to approve the resolution plan before the deadline, the companies may have to undergo liquidation proceedings.
Alok Industries, one of the 12 large non-performing assets identified by the Reserve Bank of India, owed a total of about Rs24,000 crore to a group of lenders, including State Bank of India as of March-end 2017.
One of the largest integrated textile manufacturers in India by capacity, Alok Industries owns four manufacturing units in the country and exports its products to over 90 countries across the US, Europe, Latin America, Asia and Africa.
The company has, in recent years, been handicapped by low plant use due to a lack of capital.
Alok Industries is a leader in apparel fabric business, which is also the largest revenue generator for the company.