Reliance Industries announced on 29th Feb that it has acquired a controlling stake in textile manufacturer Alok Industries Ltd for Rs 250 crore ($34.3 million).
Alongside JM Financial Asset Rehabilitation Co Ltd, Reliance had a bid to buy Alok Industries which had been auctioned by lenders under the insolvency and bankruptcy law to recover their unpaid loans. Alok Industries owed lenders a total of Rs 30,000 crore ($4.1 billion).
According to this deal, RIL will hold 37.7% equity share capital of Alok Industries.
RIL had planned to raise about Rs 4,550 crore ($623.5 million) through bank loans while infusing Rs 500 crore ($68.5 million) equity in Alok Industries after it recieved approval from NCLT (National Company Law Tribunal) to bid for Rs 5,050 crore ($692 million).
Established in 1986, Alok Industries is an integrated textile manufacturer with interests in the polyester and cotton segments.
Reliance Industries Ltd (RIL) in a regulatory filing said, “In accordance with the approved Resolution Plan, ALOK has today allotted 83.33 crore (11.42 million) equity shares of Re 1 ($0.014) each at a premium of Rs 2 ($0.027) per equity share for cash at total consideration of Rs 250 crore ($34.3 million) to RIL.”