Mukesh Ambani’s plan to buy out Alok Industries at fire sale prices got a green light today with the National Company Law Tribunal approving the RIL-JM Financial’s joint bid of Rs 5,050 crore for the bankrupt textile company, TV news channels reported.
Alok Industries owed its lenders Rs 29,500 crore. Whereas, Reliance Industries and JM Financial Asset Reconstruction Company had a made a bid to acquire Alok Industries for Rs 5,050 crore under the newly-instituted Insolvency and Bankruptcy Code, which the lenders had approved in June 2018. This meant that the lenders had agreed to take about 83% haircut on their dues.
Also read: Essar Steel IBC case: NCLT clears ArcelorMittal’s resolution plan
NCLT’s decision on clearing RIL-JM Financial bid for Alok Industries comes alongside another big verdict clearing ArcelorMittal’s Rs 42,000 crore bid for buying out Essar Steel under IBC.
In July 2017, NCLT’s Ahmedabad bench admitted insolvency proceedings against the textile company under the Insolvency and Bankruptcy Code. The combined bid of RIL-JM Financial for the company has already been rejected twice by the Committee of Creditors (CoC).
State Bank of India (SBI) leads the consortium of lenders claiming dues of more than Rs 23,000 crore from Alok Industries.
Last month, NCLT accepted Gail India Ltd’s petition to be treated as operational creditor in the insolvency case of Alok Industries. In its plea, Gail India had stated that the resolution professional (RP) appointed for Alok Industries had rejected its status as an operational creditor (OC) and ignored its claims for dues worth Rs 506 crore.
Alok Industries is one of the first 12 loan default cases in which the corporate insolvency resolution process (CIRP) was initiated in the country under IBC.
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