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Yarn maker Sintex Industries enters bankruptcy on creditor plea
Photo Credit: Pexels

An insolvency tribunal has admitted fraud-hit textile and yarn manufacturer Sintex Industries on a plea by Invesco Asset Management (India) Pvt Ltd over a Rs 15.4 crore default in September 2019.   

The financial creditor had filed the petition against the Gujarat-based firm in December 2019 as an investment manager for Invesco India Credit Risk Fund – a mutual fund scheme.   

The plea was filed after Sintex Industries made a disclosure in June 2019 about a Rs 90 crore default on bonds in which the fund had invested. 

Although the tribunal acted on the plea of Invesco, it dismissed Punjab National Bank's petition allowing the lender only to file its claims under the insolvency process.   

Last month, Press Trust of India reported that the bankruptcy appeals tribunal had asked the lower or insolvency tribunal to decide within a week whether to admit or reject the insolvency plea by the bank.   

Sintex Industries' subsidiaries include BVM Overseas, Sintex-BAPL and publicly listed Sintex Plastics Technology.    

In August last year, the non-bank lending arm of global private equity firm KKR approached the tribunal against a subsidiary of Sintex Plastics Technology to recover a debt it had sanctioned two years ago.  

The unit called Sintex-BAPL, engaged in the manufacturing of automotive products, owed KKR a principal sum of Rs 1,190 crore as well as interest.  

Last month, people told The Economic Times that a KKR-led group of creditors is considering settling up with the Sintex-BAPL promoter out of court.      

Meanwhile, Sintex Industries said in its financial statement for the December quarter that it has been working with lenders to bring a resolution plan in place for its business activities.   

Chairman-cum-promoter Dinesh Patel and his family owned 4.54% of the firm as on December-end 2020.   

Last year in September, Punjab National Bank and other banks declared exposure worth Rs 1,203 crore to Sintex Industries as fraud.  

As on March-end 2021, the total financial indebtedness including short-term and long-term debt stood at Rs 7,802 crore.    

Founded in 1931 at Kalol in Gujarat, Sintex Industries (formerly known as The Bharat Vijay Mills Ltd) is a diversified company. Its textile segment offers fabric and yarn.    

The plastic segment offers water tanks, doors, windows, prefab, custom moulding, and others. Its infrastructure segment undertakes engineering, procurement and construction contracts.  

For the December quarter of 2020, Sintex Industries had posted a net loss of Rs 215 crore as against Rs 293 crore loss in the same quarter in 2019 and Rs 239 crore loss in the September quarter. Its total income improved to Rs 530 crore for the December quarter in 2020, from Rs 430 crore a year ago and Rs 323 crore in the September quarter.   

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