As a part of its restructuring operations, Bombay Rayon Fashions (BRFL) will hive-off Tarapur Yarn Dying & Fabric Process unit (Tarapur assets) to its subsidiary company - BRFL Textiles (BTPL) under a slump-sale transaction. As per Business World, after BRFL transfers Tarapur assets to BTPL, a set of PE investors would infuse equity in BTPL which would be utilized for funding the working capital for ramp up of operations of Tarapur assets. This unique structure, outside the purview of the NCLT, is beneficial to all stakeholders of the company and would result in maximization of value from the Tarapur assets by retaining its‘Going Concern’ value.
The new entity will generate good revenues in excess of Rs 2,000 crore annually and will be a perfect model for ‘Make in India’, offering excellent products to replace global competition in Indian as well as international market. The economic value generated out of this transaction will offer non-monetary benefits like retention of over 5,000 employees, clearing of all statutory dues, securing payment of financial debt, catering to domestic and international demand, increasing its potential to earn foreign exchange and encouraging local brands.
