RIL-ACRE and Welspun are the first to acquire bankrupt Sintex Industries. | Photo credit: BCCL
New Delhi: Reliance Industries Ltd (RIL) controlled by billionaire Mukesh Ambani and Welspun SA would have become the main contenders for the acquisition of bankrupt Sintex Industries. It should be mentioned here that this is the second bankrupt textile manufacturer that the oil and telecom conglomerate is trying to acquire. In 2019, it acquired Alok Industries in partnership with JM Financial Asset Reconstruction Company.
RIL and Ares SSG Capital-backed Assets Care and Reconstruction Enterprises (ACRE) made an offer for Sintex as part of the bankruptcy resolution process, and proposed a resolution plan of Rs 2,863 crore comprising 10% equity to lenders, to persons directly acquainted with the matter said HEY.
RIL-ACRE and the Welspun Easygo Textile Pvt Ltd group unit are the two highest bidder among the four corporate offers that the lenders have received for the textile and yarn manufacturing company.
The financial daily quoted one of the people as saying, “There is a marginal difference between the offers made by the Reliance Industries-ACRE team and the Welspun group. The two are the highest but conditional. It is difficult to assess which of the two plans is better.
Previously, reports indicated that Sintex, which is the subject of a corporate insolvency and resolution process, had secured 16 expressions of interest (EoIs), including offers from foreign fund CarVal Investors and the company Aditya Birla Asset Reconstruction, backed by Varde Capital.
Resolution Professional Pinakin Shah has asked the two highest bidders to resubmit the revised unconditional resolution plans.
The RIL offer includes the payment of Rs 2,280 crore to financial creditors, an equity injection of Rs 500 crore for working capital requirements and the payment of Rs 83 crore to employees and trade creditors, a indicated the publication citing sources.
After the acquisition, RIL will own 79%, ACRE 11% and the lenders 10%. RIL will use a debt of Rs 2,349 crore to fund the proposed offer and it will pump Rs 500 crore as working capital requirements. ACRE will issue security receipts for Rs 14 crore to lenders. However, details of the Welspun offer are not available, the publication said.
On April 6, 2021, Sintex was admitted to bankruptcy proceedings by the National Company Law Court of Ahmedabad following a request from Invesco Asset Management regarding a default of Rs 15 crore in the payment. principal and interest on non-convertible bonds in September 2019.