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MUMBAI: Mukesh Ambani-owned Reliance Industries (RIL), has completed the acquisition of nine-decade-old Sintex Industries Ltd. by infusing ₹1,500 crore in the Ahmedabad-based yarn and fabric manufacturer, which is more widely known in the country for manufacturing black plastic water tanks.
MUMBAI: Mukesh Ambani-owned Reliance Industries (RIL), has completed the acquisition of nine-decade-old Sintex Industries Ltd. by infusing ₹1,500 crore in the Ahmedabad-based yarn and fabric manufacturer, which is more widely known in the country for manufacturing black plastic water tanks.
RIL’s investment is part of a resolution plan that was submitted jointly by the conglomerate and Assets Care & Reconstruction Enterprise Limited (ACRE) after Sintex was taken to the insolvency court for defaulting on loan repayments in 2020.
RIL’s investment is part of a resolution plan that was submitted jointly by the conglomerate and Assets Care & Reconstruction Enterprise Limited (ACRE) after Sintex was taken to the insolvency court for defaulting on loan repayments in 2020.
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In an exchange filing, Sintex said it has issued shares worth ₹600 crore and optionally fully convertible debentures of ₹900 crore to RIL, while about 599.2 million shares of Sintex, which were issued prior to the approval of the resolution plan, have been cancelled.
With the acquisition completed, RIL holds a 70% stake in SIL and the company will be jointly managed by RIL and Assets Care & Reconstruction Enterprise (ACRE). The acquisition will help expand RIL’s textile business portfolio.
Sintex Industries, founded in 1931, clocked a turnover of Rs. 3,127 crore for FY2022, as compared to Rs. 1,689 crore in FY2021.
Sintex group, formerly known as The Bharat Vijay Mills Ltd and Sintex Industries Ltd, is the world’s largest producer of plastic water tanks and Asia’s largest manufacturer of corduroy fabrics. Sintex operates in Europe, America, Africa, and Asia, especially in France, Germany, and the US.
The company recorded a consolidated total income of Rs. 804.5 crore for the nine months ended 31 December, 2022 as compared to Rs. 665.37 crore during the corresponding period of the previous year.
Earlier, Sintex Plastic Technology Ltd., the holding company, had defaulted in payment of dues to RBL Bank against its borrowings as on 31 March 2020. The default worth Rs. 142.36 crore continues as on 31 December, 2022, as per regulatory filings in February, 2023.
Another petition has been filed by Asset Reconstruction Company (India) Ltd. (ARCH) (financial creditor) for a default amount of Rs.250 crores before the National Company Law Tribunal (NCLT), Ahmedabad for initiating corporate insolvency resolution process (CIRP) against the company. This default amount pertains to financing facility availed by Sintex-BAPL Ltd. for which SPTL had issued corporate guarantee.
The petition has not been admitted yet. SPTL had also issued corporate guarantee in respect of working capital facilities sanctioned by State Bank of India (SBI) to Sintex-BAPL Ltd. SBI has stated that working capital facilities have also been assigned to ARCIL and therefore the corporate guarantee issued by SPTL also stands assigned to ARCIL.
Sintex Plastic shares closed 1% higher at ₹1.90 apiece on BSE on Wednesday, while RIL’s shares ended 0.56% lower at ₹2,235.25.
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