Morarjee Textiles Limited has informed the Exchange about Corporate Insolvency Resolution Process
MORARJEE · price
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NCLT Mumbai Bench has approved the Resolution Plan submitted by Shriniwas Spintex Industries Private Limited for Morarjee Textiles Limited. The CIRP was initiated on 9th February 2024 on a petition filed by Axis Bank. The resolution plan is worth ₹156 crores, funded through inter-corporate deposits, unsecured loans, internal accruals, and director/shareholder contributions. The CoC approved the plan with 75.61% voting share. Secured financial creditors will receive ₹130.02 crores, while unsecured financial creditors get only ₹39 lakhs (0.07% of admitted claims of ₹128.46 crores). ACT Fininvest (16.79% voting share) dissented and filed a separate application challenging the plan's fairness, which NCLT dismissed. Implementation is to be overseen by a Monitoring Committee, with full completion within 360 days from the NCLT approval date.
The company's shares will remain suspended during the transition as management control transfers to the new resolution applicant. Existing shareholders face severe dilution as promoter shareholding will be reduced 1:30 and eventually extinguished. Unsecured creditors receive a very small recovery, while secured creditors recover approximately 18.46% of their admitted claims.