Committee of creditors approve the ₹5,000-crore deal
Mukesh Ambani-led Reliance Industries Ltd. (RIL) along with JM Financial Asset Reconstruction Company (ARC) has won lenders’ approval to buy insolvent textile firm Alok Industries for about ₹5,000 crore.
“Our resolution plan for Alok Industries is around ₹5,000 crore and it has been approved by the Committee of Creditors (CoC),” said an official of the RIL-JM Financial consortium, without disclosing further details.
However, the lenders will have to take 83% haircut as Alok Industries has an outstanding loan of more than ₹29,500 crore. “Pursuant to the order dated 11th June 2018 passed by the Hon’ble National Company Law Tribunal (Ahmedabad), the Resolution Plan was put to vote before the committee of creditors (CoC) of the Company on 20th June 2018. Pursuant to the voting, the resolution plan has received the assent of 72.192% of the voting share of the CoC,” said Alok Industries Resolution Professional (RP) in a statement.
Earlier, the lenders had rejected RIL-JM Financial ARC’s sole bid to buy Alok Industries as 30% of the lenders by value of the loan had voted against the resolution plan.
Before the Insolvency and Bankruptcy Code (IBC) was amended, a minimum of 75% of the lenders had to approve a resolution plan.
However, after a recent amendment to the IBC, 66% of creditors by value need to approve a resolution plan for it to go through.
“Accordingly, RIL-JM Financial ARC sole bid for Alok had been accepted by majority of the lenders,” said the official at the consortium.