REI Agro goes in for liquidation

REI Agro, a firm that claims to have 22 per cent share in the world’s basmati rice market, has gone in for liquidation after the National Company Law Tribunal (NCLT) ordered it to do so.

The company, which sells Rain Drops basmati rice, said in a BSE filing that insolvency professional Anil Goel is the official liquidator of the company. It said the board and key managers have lost their powers and all employees have been discharged of their duties. REI Agro’s insolvency case had been admitted by the Kolkata bench of the NCLT in March. The NCLT can order liquidation if a firm fails to bring to the table a resolution plan within six months of admission of the case.

The company ended FY16 with losses of ~1,076.13 crore. Its standalone turnover for that year was ~521.79 crore. According to the annual report, it owed 22 banks an amount of ~4,745.24 cr. It has also not provided interest on loans availed from banks and financial institutions. The firm’s slowdown started when it began facing liquidity crunch. Due to the shortage of working capital funds, processing units were running with marginal capacity and production was suspended in many plants during the year under review.

The annual report also showed that it attempted to restructure itself. However, banks rejected the plan proposed by the company. It also said several banks had initiated action against the company under the SARFAESI Act.