Textile maker Alok Industries may be facing liquidation as the resolution plan submitted for the company by Reliance Industries-JM Financial ARC consortium, failed to get the requisite votes from the lenders.

Reliance Industries-JM Financial ARC was the sole bidder for the company in the second round of bidding conducted by the resolution professional under the IBC process.

The Committee of Creditors(CoC) concluded its voting in the Alok Industries resolution case this morning.

Sources said the offer from RIL-JM failed to meet the 75% voting mark from the lenders. Only 70% of the CoC voted in favour of the bid, while 30% rejected it, and hence the resolution plan stood rejected.

According to IBC norms, a resolution plan is accepted if a minimum of 75% of lenders vote in favour of the plan.

Sources say RIL had offered an all-cash deal of approximately Rs 4800 crore for Alok Industries. Some lenders favoured liquidation as the bid value was very close to the liquidation value of Rs 4200 crore, which they felt could be recovered easily.

“As a policy, we do not comment on media speculation and rumours. Our company evaluates various opportunities on an ongoing basis.

We have made and will continue to make necessary disclosures in compliance with our obligations under Securities Exchange Board of India (Listing Obligations and Disclosure Requirements) Regulations 2015 and our agreements with the stock exchanges," said Reliance Industries.

In the earlier round of bidding, no bids were accepted as the sole bidder at the time- JM Financial ARC- did not make proper disclosures about its bid.

“In the ordinary course of business, JM Financial ARC does submit resolution plan, from time to time, based on the opportunities available to it. Accordingly, JM Financial ARC had submitted a resolution plan jointly with Reliance Industries Limited for resolution of debt of Alok Industries Limited under the provisions of the Insolvency & Bankruptcy Code, 2016,” said JM Financial in a statement.

The 270-day deadline for resolution of Alok Ind under IBC is set to expire on April 14. With RIL-JM Fin ARC’s resolution plan being rejected, the company with claims of over Rs 29,400 crore will likely head into liquidation. State Bank of India has the largest exposure to Alok Ind among financial creditors.

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First Published:Apr 12, 2018 3:49 PM IST