As Alok Industries goes to bankrupcy, 12k employees set to lose jobs
With Alok Industries heading into likely liquidation, about 12,000 permanent employees of the company are set to lose jobs in what could be the biggest labour casualty since the implementation of the bankruptcy code according to a report published in Economic Times.
These employees earned an average salary of Rs 1.45 lakh a year, show data compiled by Corporate Professionals that used the financials reported by the company for 2016-17. Alok Industries was subsequently referred for insolvency proceedings.
There were 11,759 full-time employees as on March 31, 2017, while total staff strength was 18,000. Staff costs amounted to Rs 283.31crore during that financial year.
Hundreds of small vendors and service providers to the company would also be affected. About 2.05 lakh equity shareholders, including public financial institutions and retail investors, are also staring at losses with the company heading into liquidation. The Company owes Rs 29,500 crore to the lenders.
According to experts while considering the resolution plans, lenders are looking at only the recovery aspect. If they feel that an offer does not meet their expectations, they refuse to approve the resolution plan and the company goes into liquidation. While lenders must protect the commercial interest, they should also look at the collateral damage of liquidation.