A consortium led by Reliance Industries Ltd (RIL) is among companies seeking to acquire Sintex Industries Ltd, the bankrupt textile maker said in a stock exchange filing on Sunday.
RIL has formed a partnership with Assets Care and Reconstruction Enterprises Ltd to bid for Sintex as part of the bankruptcy resolution process.
The other potential bidders are Easygo Textiles Pvt. Ltd of Welspun Group, GHCL Ltd, and Himatsingka Ventures Pvt. Ltd, along with Shrikant Himatsingka and Dinesh Kumar Himatsingka.
“The resolution plans received shall be evaluated by the interim resolution professional and then shall be placed before the committee of creditors for its further consideration,” Sintex said in the filing.
This is the second bankrupt textile maker that RIL is trying to acquire.
In 2019, RIL and partner JM Financial Asset Reconstruction Co. Ltd acquired insolvent textiles player Alok Industries Ltd. The RIL-JM Financial ARC combine bid ₹5,000 crore for Alok Industries, which owed over ₹30,000 crore to 27 banks led by State Bank of India, Axis Bank, Corporation Bank and UCO Bank, among others.
Alok Industries has a factory each in Silvassa, Vapi, Navi Mumbai and Bhiwandi, which can produce up to 68,000 tonnes of cotton yarn and 170,000 tonnes of polyester annually.
Sintex was founded in the 1930s as Bharat Vijay Mills, a composite textile mill in Kalol, Gujarat. Forty years later, it was rebranded as Sintex Industries, a cotton yarn and fabric maker.
The bankrupt company’s customers included top luxury names such as Hugo Boss AG, Diesel and Burberry, which have now also forged alliances with RIL’s retail arm.
Sintex, according to an analyst, could fit well with RIL’s plastics and textiles business.
“Sintex became a household name, thanks to its water tanks. But after it aggressively expanded its spinning business (which it forayed into in the 1990s) from around 25,000 spindles to a million spindles at its Kalol factory, trouble started brewing,” said the analyst.
In 2017, Sintex demerged its plastic business into Sintex Plastics Technology to focus on its yarn business.
But by then, the textile industry saw many companies add spinning capacity, which impacted sales. The covid-19 pandemic dealt another blow to its business.
In April 2021, the Ahmedabad bench of National Company Law Tribunal (NCLT) admitted an insolvency process plea filed by Invesco Asset Management (India).
So far, claims totalling more than ₹7,500 crore from 27 financial creditors have been admitted. These include HDFC Bank, Axis Bank, Aditya Birla Finance, Life Insurance Corp. of India, and State Bank of India.
Source: Mint