reliance: RIL team among five bidders in race for bankrupt Sintex Industries
The other two bids for the Gujarat- based manufacturer of textiles and yarns were from Himatsingka Ventures Pvt Ltd and GHFC Ltd, the same people said.
Sintex Industries Ltd, which is undergoing a corporate insolvency and resolution process, had received 16 expressions of interest including bids from foreign fund CarVal Investors and Varde Capital-backed Aditya Birla Asset Reconstruction Company.
Some applicants who had submitted expressions of interest had sought a longer time for due diligence. Consequently the resolution professional in consultation with lenders has extended the deadline for submitting firm bids to November 10, said one of the two people quoted above. The offers made by the five bidders will be opened along with other bids that the RP may receive, the same person said.
Lenders are expecting aggressive bids from the Reliance-Acre team, the Welspun entity and Trident said the second person. Trident, which manufactures cotton yarn, terry towels, bed linen, and paper; and Welspun, which makes and exports bed and bath textiles, would find synergy in acquiring Sintex, said one of the lenders. For RIL, the attraction for Sintex is primarily driven by the fact that it is expanding in the retail segment, the same person said. Amit Patel and his family promoted Sintex Industries specialises in the premium fashion industry as it provides fabric to global clients such as Armani, Hugo Boss, Diesel, and Burberry, according to the company’s website.
Reliance Industries, ACRE, Welspun, Trident, Himatsingka, GHFC, and the resolution professional did not respond to request for comments.
The Gujarat-based textile company was admitted into the insolvency process by the Ahmedabad bench of the National Company Law Tribunal in April this year at the behest of Invesco Asset Management (India) Pvt Ltd over a ₹15.4 crore default in payment of principal and interest of non-convertible bonds in September 2019. The resolution professional, (RP) Pinakin Shah, has admitted ₹7,534.6 crore claims from 27 financial creditors.
In May this year, 90% of lenders by value voted on a resolution to appoint EY backed Shailendra Ajmera as a resolution professional replacing Pinakin Shah.
However, this resolution was overruled by NCLT on October 5 on the ground that the replacement of the resolution professional would delay the resolution process.
The court also observed, “Ajmera falls into the definition of the related party and therefore not entitled to take up the assignment of RP.” Ajmera is a partner of Ernst & Young LLP, which was appointed as an agency for Special Monitoring (ASM) of Sintex BAPL, which is a subsidiary of Sintex Industries, according to the court documents.
In 2017, Sintex Plastics Technology Ltd, maker of water storage tanks, was demerged from Sintex Industries.
Its lenders include HDFC Bank, Axis Bank, RBL, Aditya Birla Finance, IndusInd Bank, Life Insurance Corporation and State Bank of India. Punjab National Bank with exposure of ₹1,230 crore, Punjab & Sind Bank at ₹249.4 crore and Karnataka Bank at ₹108 crore have declared Sintex Industries as a fraud account.
The Supreme Court in December 2020 however restrainded Axis Bank from declaring this account as fraud while observing that PNB had done so without serving a notice to the promoters or giving the promoter a personal hearing. Sintex had defaulted on 10.70% ₹ 90 crore non-convertible debentures held by Axis Bank.
Early this calendar year, Welspun Group had offered ₹1,950 crore to settle all lenders dues as upfront cash payment but the negotiations did not progress because two large commercial banks found the offer very low, as reported earlier.