Financial services firms including Eight Capital and Finquest Financial Solutions are also among the bidders
A few private equity funds and asset reconstruction companies have shown interest to acquire Reid & Taylor India (RTIL), formely known as Reid & Taylor speciality textile brand, from S Kumars group.
Private equity investors including Carlyle and Kotak, ARCs including Suraksha, Invent, Phoenix and hedge fund SSG's Acre have put in their expression of interest. Financial services firms including Eight Capital and Finquest Financial Solutions are also among the bidders.
"The resolution professional, Venkatesan S, had earlier invited 'expression of interest' from prospective lenders, investors or other persons for submitting a 'resolution plan' in accordance with the provisions of Insolvency and Bankruptcy Code (IBC) to restructure RTIL, which is struggling to pay off Rs 3,800 crore debt.
The downfall of the brand began in 2009 when it acquired bankrupt US luxury brand Hart Schaffner Marx, which specialised in making clothing for American Presidents. When Hart Schaffner Marx went bankrupt in 2008-09, promoter Kasliwal, armed with bank loans, acquired the company, which could never be turned around.
This was a decade after S Kumars group acquired the rights to manufacture and market the Scottish brand Reid & Taylor, which came with a tag line, 'bond with the best'. Amitabh Bachhan replaced Pierce Brosnan as its brand ambassador. The high decibel brand campaigns also came at a cost, forcing the company to default on its payments to the banks.
In a recent order, NCLT bench of V Nallasenapathy, member (technical) and Bhaskar Pantula Mohan, member (judicial) noted that RTIL had defaulted in repaying the loan availed from its lenders while admitting a petition filed by Edelweiss Asset Reconstruction Company, an assignee of debts by Export Import Bank of India, which had sought insolvency resolution process of RTIL.
NCLT also restrained the company from transferring, encumbering, alienating or disposing of any of its assets or any legal right or beneficial interest therein until the case of insolvency is decided.
In India, Reid & Taylor was launched in 1998 with a fabric plant in Mysore in Karnataka.
"In spite of the pile up of debt, the backbone of the brand, the Mysore factory has never been shut down, and even today works at 30-40% of its capacity," a source closely associated with the company. The machines are up to date and the quality of the production is also not compromised and is at par with the best in the segment.
The company also attracted investments from Singapore-based GIC Special Investments, which invested Rs 900 crore for a 25.4% stake, creating the brand valuation of Rs 3,540 crore in 2008. The apparel range included formal and casual daywear suits, jackets, trousers, shirts, ties and accessories along with a wide selection of T-shirts, jeans, and other weekend wear.
"All dues, including those of over 1,200 employees are paid more or less on time. There are currently no outstanding dues pending with external vendors either," said another person who is looking into the case.
Reid & Taylor was originally started by a Scottish man Alexander Reid in the 1830s. The concern, financed by Joseph Taylor, went on to become a notable worsted suiting brand. Synonymous with the British tradition, Reid & Taylor has been styling the world's elite for over 170 years.
BOND WITH THE BEST
- Rs 3,800 crore-- Debt of Reid & Taylor
- Rs 900 crore – invested by GIC Special Investments in the company in 2008
- Amitabh Bachhan as the brand ambassador also did not help the fabric maker
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