Uniworth creditors spar over ARCIL referral

The creditors of sick company Uniworth Ltd appear to have fallen out among themselves, with some of them in effect reversing the earlier decision to refer the company to the Asset Reconstruction Company of India Ltd (ARCIL).

The term lender, State Bank of India, still wants Uniworth to be referred to ARCIL. But one or two other banks in the consortium was of the view that more money could be recovered from Uniworth either through the securitisation route or through sale of assets.

Uniworth was among 15 companies that ARCIL had decided to dispose of in the first round.

A banker from the Uniworth consortium on condition of anonymity said one or two banks were firm on not referring the company to Arcil.

These banks appeared to prefer recovery of money through sale of assets, although it was yet to make a formal proposal either to other banks and the company.

Executive director, Uniworth, Kishor Jhunjhunwala said, "We are yet to receive any such formal proposal from banks." The Uniworth issue has witnessed other disagreements in the past.

ICICI Bank had earlier disagreed with other lenders on pricing of Uniworth's assets when a proposal to hand over management to a different company had arisen.

ICICI Bank had backed a plan to hand over the Ajai Lohia promoted Uniworth at Rs 141 crore, against a single bid received from Indoworth Thailand "" an Indorama Thailand Group (ITG) company promoted by another branch of the Lohia family.

But 12 banks had objected then to ICICI Bank's decision, which was then abandoned and a unanimous decision reached to refer Uniworth to ARCIL.

Some banks were concerned that ITG was also Lohia owned and Uniworth would go back to the family for only Rs 141 crore against bad debts of Rs 600 crore.

Uniworth was promoted by Ajai P Lohia, also group managing director of Uniworth Group. ITG belonged to Anil P Lohia, vice-chairman and chief executive officer. But Ajai P Lohia was also non-executive director of ITG and was Anil P Lohia's brother.