Reliance had jointly bid for Sintex along with Assets Care & Reconstruction Enterprise (ACRE).
Mukesh Ambani-promoted Reliance Industries, India’s biggest company by market value, has completed its Rs 3,567-crore acquisition of textile company Sintex Industries exactly a year after banks had approved the acquisition and a month after the National Company Law Tribunal (NCLT) approved the transaction.
The money was transferred and distributed to banks late evening, completing the resolution of the sick company.
Both operational creditors and financial creditors including banks have received the money. For public sector banks, this is a big relief just before the end of the financial year as this account was fully provided for and will result in a full write back which will directly enhance bottomline.
The lead lender, Punjab National Bank (PNB), received Rs 700 crore from the transaction, followed by Bank of Baroda (BoB) at Rs 533 crore. Exim Bank of India, which was the third largest creditor, stands to gain Rs 389 crore from this resolution.
Reliance had jointly bid for Sintex along with Assets Care & Reconstruction Enterprise (ACRE). It had received approval to acquire the debt-laden textiles firm from the Committee of Creditors (CoC) of Sintex on March 20 after more than 97 per cent of the lenders had voted in favour of the plan.
However, litigation around the transaction, issues linked to claims of related parties and some government refunds delayed the case.
The NCLT finally approved the plan in February this year rejecting unsecured creditor Axis Bank’s appeal for an equitable distribution.
Lenders had agreed to settle Sintex’s total debt of Rs 7,719 crore at a haircut of 54 per cent from among four resolution plans submitted to creditors.
This is RIL’s third acquisition through the bankruptcy process. In 2020, it had completed the acquisition of another distressed textile company, Alok Industries, in association with JM Financial Asset Reconstruction Co.
Most recently, in December 2022, its telecom arm Reliance Jio completed a Rs 3,720-crore transaction to acquire RCom’s tower and fibre assets, Reliance Infratel.