Reliance Industries has reported that its resolution plan for acquiring Alok Industries in conjunction with JM Financial Asset Reconstruction Company has been rejected by the committee of creditors (CoC).
JM Financial had bid jointly with Reliance Industries to acquire mega textile producer Alok Industries. As per the guidelines of Insolvency and Bankruptcy Code, a failure in approval of the resolution plan within the prescribed timeline can make the assets go into liquidation.
A RIL spokesperson in a regulatory filing to the exchanges said,
We have been lately informed that our plans have not aligned favorably with Committee of Creditors as required under the Insolvency and Bankruptcy Code.
Alok Industries had earlier reported that Corporate Insolvency Resolution Process (CIRP) had already expired on April 14, 2018.It was granted 270 days for the process during which it managed to get only 1 bid which too now stands rejected by the creditor’s committee.
Earlier in July 2017, National Company Law Tribunal’s Ahmedabad branch had admitted insolvency proceedings against the textile manufacturer under the Bankruptcy and Insolvency code.A consortium SBI of lenders led by is currently claiming dues over Rs. 230 billion from Alok Industries.