JM Financial And RIL Jointly Bid For Acquiring Alok Industries Assets
Reliance Industries has bid in collaboration with JM Financial ARC to buy the bankrupt company Alok Industries. The second round bidding for this textile company was completed on March 27. With the bidding of Reliance, banks are finding that the losses suffered by Alok Industries deal, will no longer have the same deficit.
Two senior officials said, “Alok Industries has got only one resolution plan. Reliance Industries and JM Financial have given this joint bid in the second round. Alok’s resolution professional Ajay Joshi had advised the bid for the second round of the company as he got the bid from JM Financial ARC in the first round only. The first round of the deadline ended in the second week of March. Joshi had fixed the deadline of March 27 for the second round of bidding.
It had been previously stated that that Reliance Industries had shown curiosity in purchasing some assets of Alok Industries. Reliance Industries had not specified the Expression of Interest (EOI) for the textile firm, but senior officials of the company had held numerous rounds of discussions to buy the complete company or some of its businesses from banks. Alok Industries has a debt of Rs 29,519 Crore. Banks have 85% loss on accepting the offer offered by JM Financial ARC in the first round. Banks have not yet received the information of second round offers, but they expect this bid to be higher than the first round.
The resolution of the company had strict conditions for the bidders. These included restrictions for the company to be seized from the stock market for five years and prohibiting the reduction of stakes by 51% after the banks’ permission. He also said that potential investors should be ready to invest 500 Crore after buying the company. The net worth of the bidder should be at least 500 Crore and has assets of Rs 3,000 Crores under management.