ARCIL revives ailing Malwa Industries with working capital funding

Leading asset reconstruction company ARCIL has revived Ludhiana-based ailing denim manufacturer Malwa Industries with a last-mile funding towards working capital needs to the tune of Rs 20 crore, after acquiring over Rs 500 crore of the company's debt.

Malwa Industries is one the few integrated denim manufacturers in the country with all activities from spinning to garmenting under one roof in India's cotton belt Ludhiana.

ARCIL acquired more than 97 per cent of Malwa Industries' total debt of Rs 550 crore from a consortium of five lenders between FY18 and FY19 to fast track the revival. It is now in the process of acquiring the remaining outstanding debt, a top ARCIL official said.

The company has a marquee client base spread across global markets included Levi's, US Polo Association, H&M, Debenhams, United Colors of Benetton, Killer, Pepe and Jack & Jones.

During peak performance in FY06, Malwa Industries with 20 million metres per annum (MMPA) capacity reached a turnover of Rs 204 crore and EBITDA of 31 per cent compared to industry leaders' EBITDA margins of around 25 per cent.

ARCIL CEO and MD Vinayak Bahuguna said, "We recognised the need for additional working capital for the ramp-up of the business and thereafter we injected last mile funding towards working capital requirement to the tune of Rs 20 crore."