Shares of Alok Industries hit lower circuit of nearly 5 per cent in opening trade on Monday after lenders to the company reject a revised offer by Reliance Industries-JM Financial Asset Reconstruction Company to acquire the bankrupt company.
The scrip slipped 4.95 per cent to Rs 3.84, whereas benchmark BSE Sensex was down 0.23 per cent at 34,113 at around 9.35 am (IST).
RIL had bid jointly with JM Financial to acquire the debt-ridden textile manufacturer Alok Industries Ltd.
“As intimated earlier, Reliance Industries Limited in conjunction with JM Financial Asset Reconstruction Company Limited submitted a resolution plan for Alok Industries Limited. We have been informed that our plan did not meet with the approval of the Committee of Creditors of Alok Industries as required under the Insolvency and Bankruptcy Code,” RIL said in a regulatory filing to the exchanges.
Reliance Industries, in partnership with JM Financial ARC, was the sole bidder for the bankrupt company that is facing claims of Rs 29,500 crore from financial creditors, according to a report by Economic Times.
Only 70 per cent of the lenders endorsed the revised all-cash offer of Rs 5,050 crore, which was just about Rs 100 crore higher than the previous offer, said two senior officials who did not want to be named. For a resolution plan to be accepted, at least 75 per cent of the lenders have to vote in its favour.
This is the second time that lenders have rejected the Reliance–JM Financial ARC offer on grounds that it is very low. At first, the bidder offered Rs 4,950 crore, which was rejected by 30 per cent of the lenders by value. Within 24 hours, Reliance-JM Financial ARC gave a revised offer and urged lenders to vote on it Friday evening.
Source: Economic Times