A KKR-led group of creditors is weighing an out-of-court settlement offer of Rs 1,100 crore made by Sintex group’s promoter Amit Patel, who wants them to withdraw insolvency proceedings that they had filed against his company Sintex-BAPL at the National Company Law Tribunal in August, according to people aware of the matter.
Patel’s offer has the backing of Arpwood Capital, a firm founded by former Carlyle executive Rajeev Gupta, these people said.
The creditors include a very diverse mix of stakeholders including banks, mutual funds and employee provident funds of A-listed companies that have subscribed to debentures of Sintex-BAPL. State Bank of India is amongst the banks in the group.
Sintex-BAPL has total borrowings of around Rs 2,800 crore. KKR India Financial Services, the credit arm of the private equity firm, had led a Rs 1,250 crore investment in Sintex-BAPL in May 2018. The investment was in the form of non-convertible debentures.
KKR had not responded to ET’s queries until press time. Patel could not be reached for comment. Arpwood Capital declined to comment when contacted.
KKR’s portion of that original investment is pegged at Rs 430 crore. The rest of the funds were contributed by co-investors.
The private equity fund has a lien on Sintex-BAPL’s shares. It has been resisting the withdrawal of the insolvency proceedings of the company at NCLT through its advocates Trilegal.
Sintex-BAPL was once the group’s cash cow, making plastic moulded components like rear view mirrors for sports utility vehicles. The group is generally known for making water storage tanks and Textile yarn and Fabrics. The auto components business is more global with overseas subsidiaries in the US and an international customer base.
Sintex-BAPL reported revenues of Rs 1,000 crore for the financial year 2019-20 as per latest available financial statements. It reported losses of Rs 500 crore.
Patel has been trying to salvage the group’s other major business of textiles, which is housed in listed Sintex Industries. Sintex-BAPL is a subsidiary of the listed Sintex Plastics.
The number of out-of-court settlements that are under active consideration with banks is rising as several companies look to withdraw insolvency proceedings that were initiated against them but are still lying pending in court as the March 25 deadline for moratorium on corporate insolvencies nears, according to banking sources. Companies that have not yet been dragged to NCLT are trying to pre-empt any possible legal action by banks by offering settlements.
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