NCLT admits bankruptcy petition against apparel firm Provogue: Report

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The Mumbai bench of the National Company Law Tribunal (NCLT) admitted an insolvency resolution against apparel brand Provogue (India) Ltd, according to a report by Mint.

Andhra Bank has filed the insolvency petition against the apparel brand, claiming dues of Rs 90 crore. The firm's total debt to all lenders, including IndusInd Bank, Corporation Bank, Punjab National Bank and SIDBI, adds up to Rs 228 crore.

A division bench of Bhaskara Pantula Mohan and V Nallasenapathy named Jitendra Kumar Yadav as a resolution professional after admitting the company for corporate insolvency resolution process (CIRP), the report said.

“There is an admitted debt by Provogue and the company’s account was declared a non-performing asset (NPA) in July 2017,” Rohan Agrawal, counsel for Andhra Bank told the paper, adding that the petition deserves to be admitted.

In FY18, the company posted a loss of Rs 154 crore on sales of Rs 91 crore.

The firm's promoters— Nikhil and Akhil Chaturvedi— lost control of the company in 2016 to a group of lenders led by Andhra Bank, who acquired 51 percent in the company in exchange of debt for equity.

The company is keen on a revival and the lenders are hoping for quick resolution due to good brand recall, Nishit Dhruva, a managing partner of law firm MDP and Partners, who was advising Andhra Bank in the case, told the paper.

The resolution professional, however, feels that it may be too soon to say anything. “It’s too early to say anything but I am looking forward to a faster resolution in the case,” Yadav told the paper.
With Provogue joining the insolvency resolution, the number of companies seeking a loan resolution in bankruptcy courts from the textile and garment sector rises to four. Reid & Taylor India Ltd, Mandhana Industries and Alok Industries Ltd are already in various stages of insolvency resolution.

Provogue, which started off primarily as a menswear fashion brand in 1998, now sells womenswear and accessories, including watches, footwear and sunglasses.

At its peak in 2011, the company had 350 stores in 73 cities. The firm has its own garment manufacturing facilities in Daman and in Baddi, Himachal Pradesh.