Garden Silk Mills Ltd, the maker of the once-famous Garden Vareli printed silk sarees, is being acquired by Bengali entrepreneur Purnendu Chatterjee for Rs 747 crore through an insolvency resolution process.

A bench of the National Company Law Tribunal approved the resolution plan submitted by MCPI Pvt Ltd, a company under The Chatterjee Group (TCG), paving the way for the acquisition of the Surat-based textile maker promoted by Praful Shah and his family.

Garden Silk Mills is a publicly listed company whose shares are traded on the stock exchanges.

Following the completion of the transaction, it will be delisted from the bourses, merged with MCPI and also become a private company, court records showed. The process to complete the transaction will take about 90 days.

The company’s products encompass the entire value chain in textiles, specialising in the manufacture of polyester filament-based yarns, textile-grade polyester polymer and fashion fabrics for women’s wear in polyester and pure cotton. The company is one of the largest sellers of branded sarees and dress materials in India.

It posted a turnover of Rs 2,877.09 crore in 2019-20 and a loss before tax of Rs 207.6 crore. The company has two plants, both located in Surat, Gujarat. It is also a large exporter of polyester chips. Garden went into bankruptcy court under the Insolvency & Bankruptcy Code after it failed to pay creditors.

The corporate resolution insolvency process was initiated by Invent Asset Securitisation & Reconstruction Pvt Ltd, who took over the debts from a clutch of banks and financial institutions in February 2020. The financial creditors will receive Rs 717 crore compared with their admitted claim of Rs 2,090 crore.

The court approval marks the third publicly known big ticket acquisition made by TCG in the recent past. In the midst of a raging global pandemic, it acquired Lummus Technology, a US-based top notch material technology firm, in partnership with Rhone Capital for $2.725 billion in July 2020.

In 2016, Chatterjee founded TCG had acquired the chronically loss making Mitsubishi Chemical’s PTA plant at Haldia for around Rs 300 crore and within a short span of time, turned around the fortunes of the company. The business he acquired from the Japanese was later renamed as MCPI Pvt Ltd, that produces purified terephthalic acid (PTA), one of the main raw materials for the makers of polyester products such as Garden Silk Mills. MCPI was one of the suppliers of Garden Silk Mills too.

“This is a very good acquisition. The company had some issues which can be sorted out. After all, Purnendu is a man with the Midas touch,” a source aware of the development said on Thursday.

Before MCPI, Chatterjee in 2015 brought back Bengal’s showcase industrial project Haldia Petrochemicals from the brink of bankruptcy, took majority control of the company by buying out the Bengal government’s stake, and made it so profitable that it powered the big ticket acquisition of Lummus.