The Mumbai bench of the National Company Law Tribunal (NCLT) has approved Shriniwas Spintex Industries Pvt. Ltd.’s Rs. 156 crore (US $16.29 million) resolution plan for debt-ridden Morarjee Textiles Ltd.
As part of the plan, Shriniwas Spintex, a manufacturer of cotton yarn in Hinganghat, Maharashtra, will also infuse Rs. 25 crore (US $2.61 million) as initial working capital based on the company’s requirements, including an upfront infusion of Rs. 9 crore (US $940,000) as fresh equity.
The Adjudicating Authority has orally approved the Resolution Plan submitted by Shriniwas Spintex Industries for the insolvency resolution of Morarjee Textiles under the Corporate Insolvency Resolution Process (CIRP) and Section 31 of the Insolvency & Bankruptcy Code, 2016. The formal Approval order is still awaited from the Adjudicating Authority.
The stock exchange filing was signed by Kishore Dhage, CEO, Whole Time Director & Compliance Officer of Morarjee Textiles Limited.
The company clarified that that the information remains subject to the publication of the Approval Order on the Adjudicating Authority’s website, following which all required regulatory disclosures will be made.
In 2024, the NCLT admitted an insolvency petition filed by Axis Bank against Morarjee Textiles, which had acknowledged dues of Rs. 892 crore (US $93.16 million) to its creditors.
Lenders including Indian Bank, Axis Bank, ICICI Bank and Tata Capital supported Shriniwas Spintex’s resolution plan, while ACT Fininvest Ltd., Kotak Mahindra Bank and some others dissented.
Morarjee Textiles, part of the Ashok Piramal Group, and one of the oldest textile manufacturers, known for cotton shirting, fashion prints, voiles and sustainable textile products has an average fair value of Rs. 229 crore (US $23.91 million) and a liquidation value of Rs. 140 crore (US $14.62 million).
