Home / Knowledge / News / Apparel/Garments / ARCIL revives ailing Malwa Industries with working capital

ARCIL revives ailing Malwa Industries with working capital

Apr '19
Pic: Malwa Industries
Pic: Malwa Industries
The Asset Reconstruction Company (India) Limited (ARCIL) has revived ailing denim manufacturer Malwa Industries in Ludhiana with a last-mile funding towards working capital needs to the tune of ₹20 crore, after acquiring over ₹500 crore of the firm’s debt. It acquired more than 97 per cent of the ₹550-crore debt from a five-lender consortium to hasten the revival.

ARCIL is now in the process of acquiring the remaining outstanding debt, ARCIL chief executive officer and managing director Vinayak Bahuguna told a news agency. Malwa Industries is one the few integrated denim manufacturers in India.

ARCIL’s restructured debt is a mix of vanilla debt, hybrid instruments and equity, which balance well the serviceability of the business and our return expectation, Bahuguna said.

Malwa has a client base spread across the globe that include Levi's, US Polo Association, H&M, Debenhams, United Colors of Benetton, Killer, Pepe and Jack & Jones.

ARCIL also provided an adequate moratorium for repayments to the company to allow it some breathing space and wrote off the unsustainable portion of the debt.

During peak performance in fiscal 2005-06, Malwa Industries with a capacity of 20 million metres per annum (MMPA) reached a turnover of ₹204 crore.

Malwa Industries faced problems in 2007-08, when the rupee appreciated against the dollar, making India's exports uncompetitive and creating an oversupply situation in the domestic market.

Further, the government hiked the minimum support price for cotton by more than 40 per cent in the following year. An unprecedented rise in cotton prices globally thereafter put pressure on the company's performance and it reported a cumulative loss of ₹139 crore between 2009 and 2014, followed by working capital shortages and under-utilisation of capacity.

The company restructured its debt under the Corporate Debt Restructuring process in 2014, buy could not receive the required additional funds in time and hence was unable to increase its production as per the plan and failed to revive.

The subsequent infusion from promoters to the tune of ₹55 crore in the form of unsecured loans and preference shares also did not suffice. (DS)

Fibre2Fashion News Desk – India

Must ReadView All

Pic: Shutterstock

Retail | On 9th Jul 2020

UK unveils 2nd part of 3-phase plan for economic recovery

Chancellor of the exchequer Rishi Sunak recently announced a slew of...

Pic: Brooks Brothers

Apparel/Garments | On 9th Jul 2020

Brooks Brothers files Chapter 11 bankruptcy proceedings

Brooks Brothers, America's oldest apparel company, recently announced ...

Pic: Arvind Fashions Ltd/Flying Machine

Fashion | On 9th Jul 2020

Flipkart invests ₹260 cr in Arvind Youth Brands

Flipkart Group, one of India's leading digital commerce entities, and ...

Interviews View All

Textile industry, Head honchos

Textile industry
Head honchos

Athleisure is the current buzzword in fashion

Textile industry, Head honchos

Textile industry
Head honchos

Quality should be the #1 priority

Siddharth Biyani, Mangalam Industries Pvt Ltd

Siddharth Biyani
Mangalam Industries Pvt Ltd

‘The manufacturing sector is improving day-by-day, becoming better in...

John Elmuccio,

John Elmuccio

Evolution St Louis is a company setting up a high-tech knitting facility...

Awanda Booth,

Awanda Booth

Held every year in New York City, Surtex is a global business-to-business...

Verena Ruckh,

Verena Ruckh

Brückner Trockentechnik develops, manufactures and supplies textile...

Mark Paterson, Technical Absorbents Ltd

Mark Paterson
Technical Absorbents Ltd

Mark Paterson, R&D manager of Technical Absorbents Ltd talks about Super...

Justin Chan & Shyam Gollakota, University of Washington

Justin Chan & Shyam Gollakota
University of Washington

A fabric that can store data without any electronics or batteries has been ...

Dave Rousse, INDA

Dave Rousse

INDA, a global association of the nonwoven fabrics industry, has been...

Sailesh Singhania, Sailesh Singhania Label

Sailesh Singhania
Sailesh Singhania Label

The Sailesh Singhania label was created to promote handwoven sarees and...

Aneeth Arora, Péro

Aneeth Arora

The Woolmark Company has partnered with handmade fashion label Péro and...

Anjali Bhaskar, Samatvam

Anjali Bhaskar

Anjali Bhaskar has an experience of 12 years in the fashion industry. She...

Press Release

Press Release

Letter to Editor

Letter to Editor

RSS Feed

RSS Feed

Submit your press release on


Letter To Editor

(Max. 8000 char.)

Search Companies


Leave your Comments

July 2020

Subscribe today and get the latest update on Textiles, Fashion, Apparel and so on.

Advanced Search