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In a victory for the employees of debt-ridden RTIL (formerly Reid & Taylor India), an association formed by the staff to scout for potential investors and revive the firm has secured a stay on the liquidation process.
Further, the employees’ association has also brought in Hong Kong-based SPGP Holdings (HK) Ltd as an investor. It is close to submitting a bid for the bankrupt firm.
The Mumbai bench of the National Company Law Tribunal (NCLT), which heard a December 19 petition filed by the Association of Persons (AOP) on January 1, has put the liquidation proceedings on hold till the disposal of the application. “The Corporate Insolvency Resolution Process period ended on January 1, following which the case was referred for liquidation. But NCLT, considering the December 19 application, has put the liquidation proceedings on hold till the disposal of the application,” MS Prasanna, General Secretary of the RTIL Employees’ Association, told BusinessLine .
“We also presented an investor before the court, with a director of the company also attending the court. The director also gave a written statement to NCLT that SPGP Holdings would be interested in RTIL’s resolution plans but needs 4-6 weeks to submit the resolution plan,” he said.
$250-m corpus
SPGP Holdings, which is committing to invest in RTIL by way of either equity or debt, has readied a corpus of $250 million. However, the exact amount to be invested will be decided only after a due diligence process.
The NCLT has also directed the Interim Resolution Professional to provide RTIL’s financials to the investor by January 8. SPGP Holdings will also file for a ‘co-applicant’ status along with the AOP, Prasanna added.
Earlier, nearly 200 employees of RTIL had formed an AOP to scout for potential investors, revive the company and prevent liquidation with no major investors evincing interest. Edelweiss Asset reconstruction Company Ltd had earlier dragged RTIL to the NCLT.
On Tuesday, the AOP (under the Income Tax Act, 1961, an AOP is an integration of two or more persons for a common purpose) informed the NCLT that a liquidation would cause irreparable loss and harm to the employees.
RTIL, a vertically-integrated premium clothing provider, is struggling to pay off its ₹3,800-crore debt.
The apparel range of Reid & Taylor, a brand earlier endorsed by actors Amitabh Bachchan and Pierce Brosnan, included formal and casual daywear suits, jackets, trousers, shirts and ties, accessories. T-shirts, jeans and other weekend wear. In 2008, Singapore’s GIC Special Investments invested ₹900 crore in lieu of a 25.4 per cent stake.
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