RIL-ACRE wins the offer to acquire Sintex Ltd; shares will soon fall to zero

The resolution plan of the Reliance Industries Ltd-Assets Care and Reconstruction Enterprise Ltd (RIL-ACRE) consortium to acquire Sintex IndustriesThe embattled textile company, which is subject to insolvency proceedings, has been approved by the Committee of Creditors (CoC), the company announced in an exchange filing on Sunday.

Under the winning resolution plan, the existing share capital of Sintex Ltd will be reduced to zero and the company will be delisted from the stock exchanges, i.e. BSE and NSE, he added.

“In accordance with the resolution plan of Reliance Industries Limited jointly with Assets Care & Reconstruction Enterprise Limited, it is proposed that the existing share capital of the company be reduced to zero and the company be delisted from the stock exchanges i.e. BSE and NSE. The Interim Resolution Professional is in the process of filing an application pursuant to Section 30(6) of the Code for the approval of said resolution plan by the NCLT and notice of the same shall be given to the members as required. You are requested to record the above information,” the Sintex statement added.

Related News

Budget 2022: what is the C-PACE, which Nirmala Sitharaman proposed for a rapid company exit process?

Reliance Retail acquires majority stake in designer brand Abraham & Thakore

word of caution

As is the norm for companies going through the insolvency process, equity investors are the first to be affected. Retail investors who still hold the stock will see their capital reduced to zero in the coming days.

Market experts have warned investors to refrain from buying the meter, especially in light of the rampant pump and dump schemes stoked by social media influencers.

Related News

Application for the PLI program for the textile sector extended until February 28

Deepak Shenoy, founder and CEO of CapitalMind, advised investors not to buy the stock. “If you own SINTEX, please note: the share is likely to drop to zero. Both resolution plans indicate that they will reduce equity to zero. Be warned,” he first tweeted on January 12.

“All equity will be written off, written off, shares will drop to zero. Be aware, don’t buy,” he said in a statement on Twitter on Sunday.

Bid for Sintex Ltd

Apart from the RIL-ACRE consortium, other candidates who bid for the struggling textile company are Himatsingka Venturesa Welspun Group entity and GHCL. The winning resolution plan will now be submitted to the Ahmedabad bench of the National Company Law Court (NCLT) for his approval. According to Economic Times, RIL-ACRE’s offer was Rs 3,651 crore with a payment plan for verified lenders, trade creditors and employees. The plan also includes 15% equity for verified lenders, which was part of the winning call for the offer, the report added citing the sources.

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