Against the total admitted pending debt claims of Rs. 892 crore (US $ 104.46 million) , Wardha-based Shriniwas Spintex Industries has been proclaimed the successful bidder to acquire Ashok Piramal Group’s Morarjee Textiles, with an offer of Rs. 156 crore (US $ 18.26 million) .
Thirty per cent of the total payment will be made up front by Shriniwas, with the remaining sum to be paid over the course of two years. The Insolvency and Bankruptcy Code’s (IBC) 29 A rules excluded two other bidders, the real estate firm Dev Land & Housing and the Nagpur-based Nirmal Ujjwal Credit Co-operative Society, leaving Shriniwas as the sole competitor.
Companies and promoters classified as insolvent, wilful defaulters, or related parties to current promoters and individuals disqualified to serve as directors are prohibited from trading in securities or bidding for assets by the Securities and Exchange Board of India (Sebi) under the 29 A regulation.
The entire budget for Shriniwas, including Rs. 39 crore (US $ 4.57 million) for process expenses, is Rs. 156 crore (US $ 18.26 million). It is less than the Rs. 170 crore (US $ 19.91 million) that Nirmal Ujjwal’s scheme is said to have cost. According to the revised claims earlier this month, financial creditors, led by Indian Bank, will receive roughly Rs. 117 crore (US $ 13.7 million) on their total receivables of Rs. 625 crore (US $ 73.19 million).
Indian Bank is the biggest creditor with Rs. 218 crore (US $ 25.53 million) in debt, or around 39 per cent of the voting share. Axis Bank is next, with Rs. 201 crore (US $ 23.54 million) in debt, or roughly 36 per cent of the vote share. Tata Capital (7 per cent), ICICI Bank, and Kotak Mahindra Bank (5 per cent each) are further secured creditors. To finish the deal, KPMG-supported resolution specialist Ravi Sethia has already applied for NCLT permission.
