INSUBCONTINENT EXCLUSIVE:
Mumbai: Lenders to Alok Industries expect to recover Rs 5,050 crore from the sale of the bankrupt company to Reliance Industries (RIL) early
State Bank of India, ICICI Bank and IndusInd Bank are funding the rest of the Rs 4,550-crore acquisition cost through a term loan that will
be syndicated to other banks later, four people familiar with the deal said.
SBI is lending Rs 1,800 crore, while IndusInd Bank and ICICI
Bank are lending about Rs 1,400 crore each for a loan to Alok, which will be backed by RIL, these people said
Company Law Tribunal (NCLT) had approved the sole RIL-JM Financial ARC bid to take over Alok.
Banks had sanctioned the loans some time ago
but were waiting for RIL to infuse equity into the company first
In a notice to the stock exchanges on Saturday, RIL said that it has taken a 37.7 per cent stake in Alok, and could raise the holding
further through optionally convertible preference shares (OCPS)
RIL has infused Rs 250 crore for the 37.7 per cent stake while the remaining Rs 250 crore has been put through OCPS issued at 9 per cent,
RIL said in the notice.
RIL is also borrowing for this acquisition through Alok for which it has given some supply guarantees
We expect the rating action to come soon and so are very comfortable giving this loan
initiated insolvency proceedings against Alok in June 2017
It was among the 12 accounts with outstanding loans greater than Rs 5,000 crore that the RBI asked lenders to refer to the NCLT process
Silvassabased Alok Industries is a fully integrated textile company with a presence in the cotton and polyester segments.
The company owes
lenders a total of Rs 30,000 crore, which means banks are taking a collective haircut of 83 per cent
bought the company for less than 20 cents and despite the year long delay faced by banks, it makes sense because of the likely rating
