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Reliance buys 37.7% stake in Alok Industries for ₹250 cr

Mar '20
Pic: Shutterstock
Pic: Shutterstock
Reliance Industries Ltd (RIL) has acquired 37.7 per cent stake in textile firm Alok Industries Ltd for ₹250 crore, the company announced late last week. Reliance had, along with JM Financial Asset Reconstruction Co Ltd (JMFARC), jointly bid for acquiring Alok Industries that was auctioned under the insolvency and bankruptcy law by lenders to recover its unpaid loans.

The Ahmedabad bench of the National Company Law Tribunal (NCLT) had last year approved the joint bid.

"Please note that in accordance with the approved Resolution Plan, ALOK has today allotted 83.33 crore equity shares of ₹1 each at a premium of ₹2 per equity share for cash at a total consideration of ₹250 crore to RIL," RIL said in a regulatory filing.

Also, in accordance with the approved resolution plan, Alok Industries has allotted 250 crore 9 per cent optionally convertible preference shares (OCPS) of ₹1 each for cash at par, for a total consideration of ₹250 crore to RIL.

In March 2019, the Ahmedabad bench of the NCLT had approved the sole RIL-JM Financial ARC bid for Alok for ₹5,050 crore. RIL had planned to raise about ₹4,550 crore through bank loans while infusing ₹500 crore equity in the company.

Mumbai-based Alok Industries, incorporated on March 12, 1986, has interests in polyester and cotton segments.

It has a product suite comprising of cotton yarn, apparel fabrics, bed linen, terry towels, embroidery, garments and polyester yarn. The company has representative offices for sales promotion in Sri Lanka and Bangladesh. It posted a profit of ₹2,283.82 crore on a turnover of ₹3,128.76 crore in 2018-19. It owed lenders a total of ₹30,000 crore.

Fibre2Fashion News Desk (DS)

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