RIL-ACRE resolution plan for Sintex gets tribunal's approval

Mumbai: The National Company Law Tribunal (NCLT) on Friday approved a debt resolution plan of Sintex Industries submitted jointly by Reliance Industries and Assets Care and Reconstruction Enterprise (ACRE).

In an oral order, the Ahmedabad bench of NCLT rejected a plea by Axis Bank, which objected to the distribution of proceeds from the sale of the bankrupt textile company, people aware of the order said.


The tribunal is yet to upload the order on its website.

Axis Bank - an unsecured creditor demanding equitable distribution of proceeds - was the only lender that voted against the RIL-Acre resolution plan, sources said.

In March last year, nearly 97% of lenders voted in favour of a ₹3,651-crore plan by the RIL-ACRE team. The resolution professional had filed for its approval with Ahmedabad NCLT the same month.

RIL-ACRE offered ₹3,651 crore as part of a plan that includes payments to verified lenders, trade creditors and employees. The duo's offer also includes 15% equity to verified lenders, which made the offer attractive.

ACRE, an asset reconstruction company, is backed by alternative investment fund Ares SSG Capital.

The proposed plan involves reduction of share capital and delisting of equity shares with zero value, according to a disclosure by the RP to the stock exchange.

Shareholders had petitioned NCLT opposing the plan since they would not receive any money against their shares, but the tribunal rejected the petition.

In November last, government-promoted ARC, National Asset Reconstruction Company of India, had offered to acquire loans of Sintex Industries from lenders, but talks did not progress due to differences over the pricing of loans.

NCTL took time to approve the RIL-ACRE plan due to litigation relating to preferential transactions, a rejected claim of Rs 531 crore from sister concern Sintex Prefab, and a refund of power and GST subsidy.

Separately, there was a dispute on the title deed of a 202-acre land purchased by Sintex before it was admitted for insolvency, but the state authority had not transferred it in the company's name.