PIRAMALBAIN UNIT, AION EYE STAKE IN ALOK INDUSTRIES
MUMBAI: Debt-laden textile maker Alok Industries Ltd, which is in bankruptcy court, has caught the eye of financial investors. A distressed asset investment platform by Piramal Enterprises Ltd and private equity fund Bain Capital Credit, and India-focused special situations fund AION Capital Partners Ltd have shown interest in buying a stake in Alok Industries, two people aware of the development said.
“The cases referred to the National Company Law Tribunal (NCLT) have been witnessing strong interest from financial investors. The likes of AION and Piramal-Bain are some of the few active investors focusing on this space and Alok Industries is one asset that’s on the radar of these funds,” said one of the two people cited above, requesting anonymity as he is not authorized to speak to reporters.
AION Capital and Piramal Enterprises declined to comment to emailed queries while Alok Industries said neither entity has approached it for investments.
Piramal Enterprises had launched a $1-billion distressed asset investment platform with private equity fund Bain Capital Credit in 2016.
Bain Capital has been actively investing in stressed assets across the globe, including Asia.
AION is an India-focused fund established by Apollo Global Management Llc. together with ICICI Venture Funds Management Co Ltd, with around $825 million in committed capital.
State Bank of India, one of the lenders to Alok Industries, had moved an insolvency petition before NCLT on June 29. On July 18, the tribunal admitted proceedings against Alok Industries, which owes about ₹23,000 crore to lenders and trade vendors.
The Ahmedabad bench of NCLT has appointed an interim resolution professional to start insolvency proceedings. The process is expected to continue till January. Alok Industries is one of the 12 large defaulters named by the Reserve Bank of India for reference to NCLT.
In June, RBI named 12 large defaulters and asked banks to initiate insolvency proceedings against them under the insolvency and bankruptcy code. These 12 companies account for almost a quarter of the bad loans in the banking system and include names such as Monnet Ispat and Energy Ltd, Amtek Auto Ltd and Essar Steel Ltd.