Arpwood Capital and Welspun group have separately made offers to lenders of KKR-backed Sintex BAPL that was admitted by bankruptcy court a year ago, said people aware about the development.
Rajeev Gupta and Raj Kataria promoted Arpwood Capital, improved their offer to Rs 1100 crore, soon after Welspun Group offered Rs 1076 crore to lenders, the people said. Both bidders made unsolicited offers last month involving upfront cash payments and seeking an out-of-court settlement.
Sintex BAPL, a subsidiary of Sintex Plastics Technology was demerged from
Ltd in early 2018. Sintex Industries, which is separately undergoing bankruptcy proceedings, has attracted binding bids from Reliance Industries and the Welspun entity, as reported by ET last month.
Lenders are working on a twin plan of getting Sintex BAPL out of the National Company Law Tribunal (NCLT) and finalising a buyer, one of the persons quoted above said.
Lenders will hold inter-se bidding to maximise their recovery, the person said. Once the buyer is finalised, they will file an application for getting the company out of NCLT, he said.
Arpwood and the Welspun group did not respond to an email sent by ET requesting to comment on the story.
The Ahmadabad NCLT admitted Sintex BAPL in December 2020, but a committee of creditors is yet to be formed. “The resolution at NCLT is no longer time-bound and thus lenders are working on an alternative route for a quicker resolution,” one of the lenders said.
Arpwood Capital in February this year had offered Rs 1025 crore, but the talks did not progress as the lenders were seeking an improved offer, the people quoted earlier said. Subsequently, KKR Financial Services, the largest lender with 13% debt, pursued the corporate insolvency and resolution process to recover its dues.
Sintex BAPL was admitted in December 2020 by NCLT based on a petition made by Zielem Industries, a trade creditor. After the company settled the trade creditor’s dues, Sintex Plastics Technology, the parent company, sought appellate authority’s approval to withdraw it from NCLT.
National Company Law Appellate Tribunal stayed the formation of the committee of creditors, asked the interim resolution professional (IRP) Ketul Patel to take charge, and sent the case back to NCLT for review.
Meanwhile, KKR Financial Services objected to the withdrawal of the company from NCLT arguing that a withdrawal is possible only under the provisions of 12 (A) with the consent of 90% of the creditors.
On 19 July, NCLT admitted Sintex BAPL for CIRP at the behest of KKR’s petition and appointed Grant Thornton backed Ashish Chhawchharia as IRP.
Interestingly, the admission to NCLT based on trade creditor petition is not withdrawn, a stay on the formation of CoC is yet to be vacated and so Ketul Patel continues to be the IRP.
Thus, the company has two IRPs. Sintex BAPL has secured financial creditors’ claims of Rs 2179.69 crore, bondholders’ claims of Rs 237.74 crore and unsecured creditors’ claims of Rs 732 crore, according to the company website.
The offer from Arpwood equates to 35% recovery on total financial creditor claims, while that of Welspun is 34%.
KKR India Financial Services and KKR Capital Markets jointly have the highest claim of Rs 513.2 crore. BoI AXA Mutual Fund’s claim is Rs 265 crore, DSP Investment Manager’s Rs 133 crore and Azim Premji Trust at Rs 194 crore. Other lenders include State Bank of India, HDFC Bank and Yes Bank.
