Winsome Yarns Limited has announced a delay in the submission of its audited financial results for the quarter and year ended March 31, 2026, citing ongoing Corporate Insolvency Resolution Process (CIRP) proceedings. The company stated that the preparation and finalization of the audited financial statements are currently under process but could not be completed within the stipulated timelines due to factors beyond its control.

The National Company Law Tribunal (NCLT) admitted an insolvency petition filed by Financial Creditor M/s Edelweiss Asset Reconstruction Company Limited on December 22, 2023. Consequently, the powers of the Board of Directors were suspended and vested with the Interim Resolution Professional and subsequently the Resolution Professional, M/s. ARCK Resolution Professionals LLP.

The disclosure highlights that the Corporate Debtor is not a fully operational entity, and most employees have left the company since the initiation of CIRP. Additionally, the entity lacks sufficient funds to make necessary payments to remaining employees on time, which has further contributed to the delay in finalizing the financial results.

Anil Kohli, Designated Partner & Authorized Signatory of ARCK Resolution Professionals LLP, confirmed that the Resolution Professional is closely monitoring the process. The company expressed regret over the delay and affirmed its commitment to submitting the audited financial results to the Stock Exchange upon completion of the reconciliation and verification exercise.

Winsome Yarns Limited has received approval from the National Company Law Tribunal (NCLT), Chandigarh Bench, for its resolution plan under the Insolvency and Bankruptcy Code, 2016. The order was passed on April 16, 2026, and the company disclosed the details pursuant to Regulation 30 of the SEBI (Listing Obligations & Disclosure Requirements) Regulations, 2015 on April 24, 2026.

Financial Position and Net Worth

The pre-CIRP net-worth of the company as per the last audited financial statements for FY 2022-23 stood at INR (40,897.33) Lakh. The post-CIRP net-worth will be determined following the implementation of the approved resolution plan. All pre-CIRP liabilities of the corporate debtor, whether crystallised or uncrystallised, stand extinguished upon approval of the resolution plan by the Hon'ble NCLT, subject to payments proposed in accordance with the approved plan.

Shareholding Restructuring

The resolution plan involves a significant restructuring of the company's equity capital. The pre-CIRP equity subscribed and paid-up shareholding comprised 7,07,07,229 equity shares of INR 10 each. The shareholding pattern as on the quarter ending March 31, 2026, prior to implementation, showed promoters and promoter group holding 38.67% and public shareholders holding 61.33%.

Post-resolution, the existing shareholders will see their equity written down to 5% on a pro-rata proportionate basis. The resolution applicant or its controlled special purpose vehicle will be allotted fresh equity shares against funds infused towards payment of unpaid CIRP costs of INR 2.5 Crores. The post-restructuring paid-up share capital will be INR 2,63,15,790.

Fund Infusion and Creditor Payments

The resolution plan involves a total fund infusion of INR 162.9 Crores including CIRP costs. The successful resolution applicant, Mohini Health & Hygiene Limited, has already deposited a performance security of INR 20,20,19,374 in the designated bank account of the corporate debtor. Additionally, Union Bank of India has issued a Principal Letter of Sanction dated September 16, 2025, sanctioning a loan of INR 154 Crores in favour of Winsome Yarns Limited.

Asset Ownership and Business Continuity

Pursuant to full and final settlement of liabilities of financial creditors in accordance with the approved resolution plan, full and absolute ownership of assets will vest in the corporate debtor. All assets of Winsome Yarns Limited subject to any encumbrance, security, and/or lien in favour of lenders will stand released free of all encumbrances to the company under complete and absolute control of the resolution applicant.

The company will continue as a going concern post-resolution, and the listing of its shares shall continue on both NSE and BSE subject to necessary adjustments in the capital structure. No additional material liabilities, other than those expressly provided for in the approved resolution plan, have been imposed on the corporate debtor.

New Promoter and Management

Mohini Health & Hygiene Limited, a public limited company engaged in manufacturing and export of surgical, absorbent and bleached cotton, surgical and hygiene products, and other medical consumables, is the resolution applicant. The present directors and key managerial personnel of the resolution applicant include Avnish Sarvapriya Bansal as Managing Director, Parul Bansal as Whole-time Director, and other directors including Mukesh Vyas, Chandrashekh Bobra, Mahesh Fogla, Mukul Jain, and Viral Rohitbhai Patel. The resolution applicant believes that the business prospects are bright and that its promoters and directors have the relevant technical knowledge and experience to manage the assets of the corporate debtor effectively.