The bankruptcy tribunal has ordered the liquidation of Khaitan Electricals Ltd, a household name for fans, air coolers and other electrical products, over unresolved debts owed to its lenders.
A consortium of five lenders -- State Bank of India (SBI), IDBI Bank, Allahabad Bank, Bank of India and Indian Bank – has loan exposures of about Rs 387 crore in the company.
Kamalesh Kumar Singhania has been appointed as the liquidator for the Kolkata-based firm, Khaitan said in a stock exchange filing.
The insolvency resolution process was initiated on November 28, 2018, after an application by Bank of India in April.
Failing to find a buyer for Khaitan, the committee of creditors resolved to liquidate the company in April.
The company's 180-day deadline to complete the resolution process ended on May 27 this year.
Founded in 1981, Khaitan Electricals Ltd came under heavy debt and its loans became non-performing assets for banks in 2017.
"Since 2014–15 onwards, the company has incurred loss and in the financial year 2017-18 the turnover further declined from Rs 79.64 crore to Rs 39 crore. Due to lower turnover by value and volume, the company incurred loss of Rs 45.8 crore (loss of Rs 298.8 crore in 2016-17)," the company said in its annual report for 2017-18.
"The reasons for non-performance of the company and incurrence of such high loss was mainly due to high cost of overhead per unit due to lower volume, inadequate internal accruals, tough competition in domestic and international markets and sluggish economic conditions, it further said.