Disclosure of salient features and details of the Resolution Plan approved by NCLT, Mumbai Bench
MORARJEE · price
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NCLT Mumbai Bench has approved a Resolution Plan submitted by Shriniwas Spintex Industries Pvt Ltd (SSIPL) for debt-ridden Morarjee Textiles Ltd. The company entered Corporate Insolvency Resolution Process (CIRP) on 09 February 2024 with a negative net worth of Rs 47,975 lakhs as on 31 March 2024. SSIPL will infuse Rs 156 crore to implement the plan, including payments to creditors. The resolution plan results in a complete wipeout of existing promoter shareholding (59.71%), while public shareholders face a severe dilution with a 1:30 share reduction ratio. Post-resolution, SSIPL will own 94.9% stake while public holding drops to just 5.1%. The company will continue as a going concern with new promoters from the textile industry.
Existing shareholders face near-total value destruction as promoter shares are extinguished and public shares are reduced by 97%. The stock will likely see extreme volatility as the new management takes control and public shareholding needs to be rebuilt to meet minimum public shareholding requirements.