RIL-led consortium to buy bankrupt firm Syntex

RIL has partnered with Asset Care and Reconstruction Enterprises Ltd to bid for Syntex as part of the bankruptcy resolution process.

The other potential bidders are Easygo Textiles Pvt. Welspun Group, GHCL Ltd., and Himatsingka Ventures Pvt. Ltd., with Srikant Himmatsingka and Dinesh Kumar Himatsingka.

“The resolution plans received will be evaluated by an interim resolution professional and then placed before the committee of creditors,” Syntex said in the filing.

This is the second bankrupt garment maker that RIL is trying to acquire.

In 2019, RIL and partner JM Financial Asset Reconstruction Company Ltd acquired bankrupt textile player Alok Industries Ltd. RIL-JM Financial ARC bids 5,000 crore for Alok Industries, which is due 30,000 crore to 27 banks led by State Bank of India, Axis Bank, Corporation Bank and UCO Bank.

Alok Industries has one factory each in Silvassa, Vapi, Navi Mumbai and Bhiwandi, which can produce 68,000 tonnes of cotton yarn and 170,000 tonnes of polyester annually.

Syntex was established in the 1930s as Bharat Vijay Mills, a mixed textile mill in Kalol, Gujarat. Forty years later, it was rebranded as Syntex Industries, a cotton yarn and fabric manufacturer.

The bankrupt company’s clients included top luxury names such as Hugo Boss AG, Diesel and Burberry, which have now tied up with RIL’s retail arm.

According to an analyst, Syntex could be a good fit for RIL’s plastics and textiles business.

“Syntex became a household name, thanks to its water tanks. But when it aggressively expanded its spinning business (which it started in the 1990s) from about 25,000 spindles to one million spindles at its Kalol factory After doing that, trouble started,” said the analyst.

In 2017, Syntex separated its plastics business into Syntex Plastics Technology to focus on its yarn business.

But by then, the textile industry saw many companies add spinning capacity, which hit sales. The Kovid-19 pandemic dealt another blow to its business.

In April 2021, the Ahmedabad Bench of the National Company Law Tribunal (NCLT) accepted an insolvency proceedings petition filed by Invesco Asset Management (India).

Total claims so far. more than 7,500 crore has been accepted from 27 financial creditors. These include HDFC Bank, Axis Bank, Aditya Birla Finance, Life Insurance Corporation of India and State Bank of India.