Fashion company Provogue set to be liquidated
The division bench of justices BP Mohan and V Nallasenapathy pronounced an oral order on Monday.
The division bench of justices BP Mohan and V Nallasenapathy pronounced an oral order on Monday. The final written order will be put on the NCLT website in the next few days. Liquidation of the company was a culmination of more than a year of insolvency proceedings in the NCLT after the case was admitted on July 25 2018.
“The only outside offer that was presented was not acceptable to the committee of creditors (CoC). There was one from the promoters as well, which was also rejected and that has meant that the company is now headed for liquidation,” said Nishit Dhruva, managing partner at MDP & Partners, the firm that represented the CoC.
The CoC was headed by Andhra Bank, which was the lead lender to the company with loans of Rs 81 crore. Other banks in the consortium were Bank of India (BoI), Corporation Bank, Punjab National Bank (PNB), IndusInd Bank and Central Bank of India. The Small Industries Development Bank of India (SIDBI) also was one of the lenders to the company. The total claims of financial creditors to the company amounted to Rs 260 crore.
Promoted by Nikhil and Salil Chaturvedi, Provogue rose to prominence on the back of its stylish clothing and high decibel marketing. It was once being endorsed by Bollywood actors Fardeen Khan, Hrithik Roshan and Sonakshi Sinha.
However, sales dropped in the last few years as the company faced competition from new brands and cut throat price competition from online retailing. Latest results from the company show that its losses widened to Rs 11.49 crore in the quarter ended June 2019 from Rs 7.19 crore a year ago. Losses widened because the company’s sales declined 58 per cent to Rs 8.82 crore in the quarter ended June 2019 as against Rs 21.10 crore in the year-ago quarter.
From a peak of Rs 74 per share in 2010, the company’s shares have been on a down slide. They fell below Rs 10 a piece in 2013 and have never recovered. The stock closed at Rs 0.66, down 1.49 per cent, on the Bombay Stock Exchange on Tuesday.
Andhra Bank owns 20 per cent of the company’s shares, BoI 9 per cent, Corporation Bank 8 per cent, Central Bank 7 per cent and PNB 6 per cent.