MUMBAI: With Alok IndustriesNSE -4.17 %headed into liquidation, its employees are making a last-ditch effort to save the debt-laden company that is a source of livelihood for about 18,000 people.
An employees’ trust has filed an interlocutory application at the National Company Law Tribunal (NCLT) against the proposed shutting down of the company, and has written to a group of dissenting creditors who voted against a resolution plan submitted by Reliance IndustriesNSE -3.31 % earlier.
ET has reviewed the application and letters sent to the lenders. An interlocutory application is moved to seek urgent relief or to bring certain new facts to the knowledge of the court.
The Alok Employees Benefit and Welfare Trust has written to lenders that included Dena Bank, Central Bank of India, IDBI Bank, Union Bank of IndiaNSE 0.85 %, and LIC of India, who voted against a resolution plan submitted by the Reliance Industries-JM Finance ARC combine, two people with direct knowledge of the matter told ET.
Banks could not be contacted immediately.
More than a week ago, the resolution professional running Alok Industries during the insolvency proceedings referred the company for liquidation as lenders failed to resolve the Rs 29,500-crore loan default under the Insolvency and Bankruptcy Code.
The committee of creditors had to reject the plan as it only obtained 70% of lender votes, 5% short of the mandated figure for now.
“The company is generating revenues and is a running firm. A sudden closure will have a disastrous effect on its large employee base,” said a senior employee, who is not authorised to talk to the media.
For example, the trust has cited the social impact on Silvassa, a Union Territory-town near Mumbai and bordering Gujarat. Alok Industries has a running plant spread across about 400 acres. The company has also been working toward the uplift of the tribal communities around its facilities there as it presently employs an estimated 4,400 tribals in its units.
The trust itself runs a school there with about 1,000 students.
Liquidation of the company would be a huge setback to the rehabilitation of the tribal population in Silvassa, which Alok Industries has strongly supported so far, the trust has argued.
“Additionally, the 4,400 families would undergo huge hardships due to loss of livelihood and uncertain prospects outside,” said another person cited above. The Reliance-led consortium is said to have offered about Rs 5,050 crore as one-time payment to lenders while it planned to infuse about Rs 1,000 crore as working capital.
In the interlocutory application, the trust has sought relief from the NCLT that will hear the plea on Wednesday at its Ahmedabad chapter. economictimes