Reliance Industries, in partnership with Assets Care & Reconstruction Enterprises (ACRE), has sought the competition panel’s approval to acquire Sintex Industries in insolvency proceedings.
The application to the Competition Commission of India (CCI) has been made at a time when lenders are close to finalising the highest bidder for the Gujarat-based textile company. ET has reviewed a copy of the application made by the Reliance-ACRE team to CCI.
Reliance Industries is India’s biggest company by market capitalization and net profit. ACRE is an asset reconstruction company backed by Ares SSG Capital Ltd.
On Tuesday, lenders asked the four resolution applicants to submit revised and improved unconditional bids by Saturday (January 29), two people aware of the matter told ET.
Reliance Industries and ACRE did not respond to ET’s request for comments.
The other three applicants in the fray are Welspun-promoted Easygo Textile, Himatsingka Ventures and GHCL Ltd.
An approval from CCI is required before lenders approve a resolution plan.
At present, the Reliance Industries-ACRE team has offered Rs 2,363 crore. This includes Rs 2,280 crore to financial creditors and the remaining to trade creditors and employees. In addition, the bidders have also offered 10% equity to the financial creditors.
Existing offers from all four bidders are below the liquidation value, which is a matter of concern to lenders given the criticism they faced for accepting Twin Star Technologies’ bid for Videocon Industries. That offer was marginally above the liquidation value.
Videocon’s committee of creditors (CoC) then had to restart the sale process following directions from the appellate tribunal.
Welspun’s Easygo Textile offered a Rs 2,300-crore resolution plan, of which Rs 2,200 crore is for financial creditors while the remaining is for trade creditors and employees.
Among the four bidders, Himatsingka is the only one that has offered a small payment to equity holders, one of the persons cited above said.
The resolution plan from Himatsingka Ventures is Rs 2,210 crore, of which Rs 2,200 crore is for financial creditors. GHCL’s offer is for Rs 2,040 crore, of which Rs 2,000 crore is for financial creditors, as reported earlier.
One of the bidders has opposed the lenders’ plan of holding a Swiss auction if the bidder does not make an improved offer. There have been precedents – in the Ruchi Soya and Dighi Port resolutions – of conducting Swiss challenge auctions for securing higher offers.
The resolution professional has admitted Rs 7,534.6 crore of claims from 27 financial creditors. Sintex Industries was admitted to the insolvency process by Invesco Asset Management after the company defaulted on Rs 15.4 crore of repayments that included both a principal component and interest on non-convertible debentures.
