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Innoventive Industries' promoter plans to salvage firm

The company used to make steel tubes and auto parts for customers including Ford, Volkswagen, Tata

Veena Mani 

illustration by binay sinha
illustration by binay sinha

The promoter of Industries, which was the first case to be admitted for insolvency, has offered to turn around the company as well as pay the debt to creditors.  “The promoter has proposed a resolution plan that will involve upfront payment to the lenders as well as infusion of new money into the company as equity,” a source close to the development told Business Standard.

The source also said that some private equity players have shown interest in buying the firm. The promoter will raise funds from non-banking finance to fund the restructuring if the Committee of Creditors and the National Company Law Tribunal (NCLT) give approval to the plan. 

The company got an extension of 90 days from the tribunal after it failed to come up with a resolution plan after 180 days. According to the and Bankruptcy Code, a company can get an extension of up to 90 days — it gets 270 days in total to finalise a turnaround plan. The company has challenged the constitutional validity of the IBC to order liquidation of the company’s assets. 

On January 17, ICICI Bank had dragged the firm to the Mumbai branch of the It owes about Rs 1,300 crore to a group of 21 financial creditors, including Bank of India, SBI-IFB Pune, Bank of Maharashtra and IDBI Bank.

There are 90 operational creditors, too, who are yet to receive their dues.

The company used to make steel tubes and auto parts for customers including Ford, and Motors. It posted its third straight annual loss in 2016, prompting ICICI Bank to initiate proceedings against it. 

In 2013, it got the empowered committees nod for Corporate Debt Restructuring (CDR) which failed. This CDR was a result of the stock coming to an all-time low that year. 

The company’s loss for the year that ended March 31, 2017, was Rs 482 crore. A few years back, the revenue was nearly Rs 450 crore. Total net worth for FY17 was Rs 822 crore. The auditors also have noted that the company has not provisioned for loans and advances to subsidiaries. Between 2010 and 2013, a number of banks had filed cases with the ministry of corporate affairs on how much the company owes them. 

Trading in the company’s shares has been suspended on BSE. 

First Published: Tue, August 01 2017. 02:05 IST