Alok Industries inches closer to liquidation

Debt-laden textile company Alok Industries is on the way to liquidation has the company’s lender rejected the rescue offer put forth by Reliance and JM Financial ARC.

The company’s Resolution Professional did not receive an approval of the Committee of Creditors for Resolution Plans proposed by Reliance Industries and JM Financial ARC. The company informed the exchanges that the Corporate Insolvency Resolution Process expired on April 14. In the absence of a resolution plan and the expiry of the 270-day deadline, the company is likely to be sold as a going concern.

Alok Industries owes approximately Rs. 29,500 crore to financial institutions. Reliance Industries and JM Financial ARC were the sole bidders for Alok Industries and it’s the second time that their bid was rejected by the lender group. Lender rejected an all-cash offer of Rs. 5,050 crore from RIL-JM, which was an upward revision of Rs 100 crore offered by them earlier, said news reports. Lenders claim that the valuations were too low.  In their first bid, JM Financial ARC had not disclosed Reliance as its strategic partner, which was the reason for the rejection.

At 12:22, the stock of Alok Industries was stuck in lower circuit at Rs. 3.84 per share, down 4.95 per cent, while the benchmark index BSE Sensex was trading at Rs. 34,137.69, down 54.96 points or 0.16 per cent on Monday.