Ashok Piramal Group‘s Morarjee Textiles has received three bids to take over the company in a court monitored bankruptcy process, people familiar with the details said. Morarjee owes creditors, led by Indian Bank, Rs 760 crore.
Last month, resolution professional Ravi Sethia received bids from Mumbai-based realtor Dev Land and Housing, Nagpur-based Nirmal Ujjwal Credit Co-operative Society, and Wardha-based Shriniwas Spintex Industries.
“The bids are between Rs 100 crore and Rs 170 crore. Nirmal Ujjwal, which also runs a textile plant, is the highest bidder with a bid of close to Rs 170 crore, excluding the process costs. Roughly Rs 140 crore is for secured creditors,” said one of the persons cited above.
At Rs 170 crore, the recovery works out to 22 per cent .
Sethia, all three bidders and process advisor to the committee of creditors, BoB Capital Markets, did not reply to separate emails seeking comment.
Indian Bank is the largest creditor with dues of Rs 224 crore representing about 33 per cent voting share, followed by Axis Bank with dues of Rs 204 crore or about 30 per cent of vote share, documents filed in court show. Other secured creditors include ICICI Bank (7.5 per cent ) and Kotak Mahindra Bank (6 per cent ).
Morarjee was admitted into bankruptcy in February after a plea by Axis Bank. Expressions of interest from prospective bidders were subsequently called in June last year.
The promoter group led by founder Ashok Piramal’s wife Urvi Piramal owns 59.71 per cent stake. Brothers Ajay and Ashok Piramal split in 2006, with textile and real estate going to the Ashok Piramal Group.
“The bids are still being evaluated. Bankers also want to make sure that section 29A of the IBC is not violated, which is taking some time,” said a second person aware of the details. Section 29A of the Insolvency and Bankruptcy Code debars insolvent persons, convicted people and wilful defaulters from submitting a resolution plan.
Although Nirmal Ujjwal’s financial bid is the highest, it has a long-drawn repayment schedule, making creditors wary. To be sure, all plans have a staggered payment schedule.
