Wardha-based Shriniwas Spintex Industries has been declared as the winning bidder to take over Ashok Piramal Group’s Morarjee Textiles, with a ₹156 crore offer against the total admitted pending debt claims of ₹892 crore. Shriniwas will be making 30% of the payment upfront while the rest of the amount will be staggered over two years.
Shriniwas remained the only contender in fray after two other bidders-real estate company Dev Land & Housing and Nagpur-based Nirmal Ujjwal Credit Co-operative Society-were disqualified under the Insolvency and Bankruptcy Code’s (IBC)’s 29 A regulations. The 29 A regulation prevents companies and promoters who are declared insolvents, wilful defaulters or related parties to existing promoters and people disqualified to act as a directors and prohibited by the Securities and Exchange Board of India (Sebi) from trading in securities from bidding for assets.
“Both Dev Land and Nirmal Ujjwal were disqualified due to previous defaults or because they were barred at some point by the corporate affairs ministry, so creditors had no option really,” said a person aware of the details.
Shriniwas’ total plan comes to ₹156 crore including ₹39 crore of process costs. It is lower than the ₹170 crore value attributed to Nirmal Ujjwal’s plan. Financial creditors led by Indian Bank will get about ₹117 crore on their total receivables of ₹625 crore according to the updated claims earlier this month. Indian Bank is the largest creditor with dues of ₹218 crore representing about 39% voting share, followed by Axis Bank with dues of ₹201 crore at about 36% of vote share, documents show. Other secured creditors include Tata Capital (7%), ICICI Bank and Kotak Mahindra Bank at 5% each.
KPMG backed resolution professional Ravi Sethia has already sought NCLT approval to complete the transaction.
Sethia and process advisor to committee of creditors, BoB Capital Markets, did not reply to emails seeking comment.
Source: Economic Times