Reliance Industries on Saturday said it has acquired 37.7 per cent stake in textile manufacturer Alok Industries Ltd for Rs 250 crore.
Reliance had jointly with JM Financial Asset Reconstruction Co Ltd bid for acquiring Alok Industries that was auctioned under the insolvency and bankruptcy law by lenders to recover their 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 Re 1 each at a premium of Rs 2 per equity share for cash at total consideration of Rs 250 crore to RIL," Reliance Industries Ltd (RIL) said in a regulatory filing.
Pursuant to this acquisition, RIL will hold 37.7 per cent equity share capital of Alok Industries, it added.
Also, in accordance with the approved resolution plan, Alok Industries has allotted 250 crore 9 per cent Optionally Convertible Preference Shares (OCPS) of Re 1 each for cash at par, for a total consideration of Rs 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 Rs 5,050 crore.
RIL had planned to raise about Rs 4,550 crore through bank loans while infusing Rs 500 crore equity in the company.
Alok Industries, incorporated on March 12, 1986, is an integrated textile manufacturer headquartered in Mumbai with interests in the 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 Rs 2,283.82 crore on a turnover of Rs 3,128.76 crore in 2018-19.
"Approval of National Company Law Tribunal, Ahmedabad Bench and Competition Commission of India have been received," the filing said.
SBI, the lead bank, had initiated insolvency proceedings against Alok Industries in June 2017. It was among the 12 accounts with outstanding loans greater than Rs 5,000 crore that the Reserve Bank of India (RBI) asked banks to refer to the NCLT process.
Alok Industries owed lenders a total of Rs 30,000 crore.