Bankrupt Apparel Brand Reid & Taylor Owes Rs 4,100 Crore to Lenders
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Bankrupt Apparel Brand Reid & Taylor Owes Rs 4,100 Crore to Lenders

Reid & Taylor logo
Sourav
Written by Sourav
sdblogs2011@gmail.com | | Published on: February-07-2019 02:45 PM

The National Company Law Tribunal, a specific division of courts that deals with issues related to bankruptcy, has ordered the liquidation of age-old apparel brand, Reid & Taylor. The company’s failing sales and rising debts came into light in 2018 after an Edelweiss Asset Reconstruction Company filed a court case regarding unpaid dues of Rs 66 crores. Soon after, Finquest Financial Solutions, another financial creditor, also filed a case regarding unpaid dues worth Rs 775 Crores.

Reid & Taylor’s Investors could not garner the required revenue

Although Reid & Taylor had a few investors vying to pick up pieces of the company, they could not come up with any funding guarantees that could validate their interest in picking it up. As a result, the NCLT ordered the liquidation of the company as it had debts worth Rs 4,100 Crore that needed to be paid back to their numerous lenders. The company’s net worth has not been revealed yet, so it is currently unclear whether they will be able to pay off their debts post-liquidation or not.

Reid and Taylor are owned by the textile company, S Kumars, after it acquired the rights to manufacture and market the garments originally made by Scottish duo, Alexander Reid and Joseph Taylor. In 2008, a subsidiary of GIC special investments bought a 24.5% stake in the company for 900 crore INR.

How did Reid & Taylor get to this point?

Once endorsed by Amitabh Bachchan, Reid & Taylor has now become bankrupt. The main cause for their downfall was the consistent defaulting on loans, which led to the amount growing beyond what they could feasibly payback. Moreover, Reid & Taylor is currently on the defaulters’ list of over 134 banks, with UCO publishing Kasliwal’s photo in the paper and shaming him for being a defaulter as far back as 2013.

Perhaps with all the defaulters and scandals that have rocked the Indian economy last year, with Nirav Modi fleeing the country after defaulting on loans worth over 14,000 Crore, the Asset Reconstruction Company and Finquest Financial Solutions probably thought it was prudent to seek action before the same happened with them. Since they first filed the case in 2018, rumours of bankruptcy had been floating around, and they have obviously been confirmed with the courts ordering liquidation. Even though investors still wanted to be associated with the brand, the NCLT had ordered them to prove their net worth, and after their failure to do so, the decision to liquidate was announced.

What is the way ahead?

As the court ordered liquidation just happened a day ago, the way forward is still unclear. Court-appointed debt collectors will first spend considerable time determining the net worth of the company before revealing the figure and proceeding to pay off their lenders. For the sake of these creditors, one hopes that they can raise the amount of money that they need!

The lesson to be learned here? If you are dodging your lenders at any point, you can only expect an eventual landslide of debt.

#apprael #fashion #reid&taylor

About the author

Sourav

Sourav

Excellent story-teller, with a background in SEO and Digital Marketing.
Likes to write and give form to opinion and incidents.

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