The financial creditors of Morarjee Textiles, led by Indian Bank, are expected to recover approximately Rs 1.17 billion from the resolution.
Wardha-based Shriniwas Spintex Industries has been selected as the successful bidder for the acquisition of Morarjee Textiles, a company formerly under the Ashok Piramal Group. The acquisition comes as part of a resolution plan submitted under the Insolvency and Bankruptcy Code (IBC) framework.
As per the resolution plan, Shriniwas Spintex will make an upfront payment of 30 per cent of the total bid amount, with the remaining balance to be paid over the next two years. The total bid value stands at Rs 1.56 billion, which includes Rs 390 million allocated towards process-related costs.
The financial creditors of Morarjee Textiles, led by Indian Bank, are expected to recover approximately Rs 1.17 billion from the resolution. This is a partial recovery against the total admitted claims of Rs 6.25 billion. Indian Bank, which is the largest creditor, has an exposure of Rs 2.18 billion and holds a 39 per cent share in the creditors’ voting rights.
The resolution professional, Ravi Sethia, with advisory support from KPMG, has submitted the resolution plan to the National Company Law Tribunal (NCLT) for final approval. Once approved by the tribunal, the acquisition process will move forward, formally transferring the ownership and operations of Morarjee Textiles to Shriniwas Spintex Industries.
The acquisition marks a significant step in the revival efforts of Morarjee Textiles and reflects the on-going consolidation in India’s textile sector, particularly under the IBC-driven resolution mechanism.
News source: Projects Today