Morarjee Textiles Limited has informed the Exchange about Corporate Insolvency Resolution Process
MORARJEE · price
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The National Company Law Tribunal (NCLT), Mumbai Bench has approved the Resolution Plan submitted by Shriniwas Spintex Industries Private Ltd (SSIPL) for Morarjee Textiles Limited under the Insolvency and Bankruptcy Code, 2016. The insolvency proceedings commenced on February 9, 2024, with the company's pre-CIRP net worth standing at negative Rs 47,975 lakhs as of March 31, 2024. SSIPL will infuse Rs 156 crore for implementing the resolution plan, including payments to creditors and stakeholders. Under the approved plan, the existing promoter shareholding (59.71%) will be fully extinguished, while public shareholders will face a 1:30 share reduction ratio. Post-resolution, SSIPL will own 94.9% while public shareholding will be reduced to 5.1%. The company will continue as a going concern with new management from the Rathi family, who bring over 10 years of spinning industry experience.
Existing shareholders face severe dilution or complete loss of holdings as the resolution plan extinguishes promoter equity and reduces public shareholdings by 97%. While the company avoids liquidation and may emerge as a viable business, current shareholders will see their investments largely wiped out under this approved plan.