Kiri Industries Limited has formally objected to an alternative transaction structure proposed by court-appointed receivers for the sale of its 37.57% stake in DyStar Global Holdings (Singapore) Pte. Ltd. The company has refused to consent to the new arrangement and has submitted its objections to the Singapore International Commercial Court (SICC).

Alternative Transaction Structure Details

The receivers have proposed a restructured deal involving both a share buyback and partial sale:

Company's Key Objections

Kiri Industries has raised several concerns with the SICC regarding the proposed structure:

Financial and Operational Concerns

• Cash Repatriation: Objects to partial repatriation of DyStar's cash from China, insisting all non-operational cash reserves be repatriated to Singapore
• Exit Certainty: Lacks certainty regarding complete exit from DyStar operations
• Automatic Termination: Demands the amended SPA should automatically terminate if not fully performed by January 31, 2026

Legal and Procedural Issues

• Receiver Powers: Questions whether share buyback falls outside receivers' powers under the appointment order
• Rights Protection: Concerns that participation may compromise existing court-ordered rights
• Extension Opposition: Objects to further extensions, advocating for alternative bidders

Court Extension Request

The receivers have applied to the SICC for extending the long-stop date from December 31, 2025, to March 31, 2026. This extension aims to provide runway for:

Transaction Timeline and Deposits

The deal has faced multiple delays since its initial announcement:

Zhejiang Longsheng Group has deposited an additional USD 5.00 million, bringing the total escrow amount to USD 13.59 million. This deposit may be forfeited at the receivers' discretion if transactions are not completed by the extended deadline.

Next Steps

Kiri Industries continues to take legal advice from its counsels and will pursue all necessary steps to protect its legal and commercial interests. The company has not consented to any extensions granted by the receivers and maintains its position against the alternative transaction structure. The SICC's decision on the receivers' extension application and the company's objections will determine the future course of this prolonged transaction.

Kiri Industries Limited has submitted a monitoring agency report from CRISIL Ratings, detailing the utilization of proceeds from its recent preferential issue of convertible warrants. The report, covering the quarter ended September 30, 2025, provides insights into how the company has allocated the funds raised.

Preferential Issue Details

Kiri Industries conducted a preferential issue from September 27 to October 15, 2024, raising a total of Rs 492.02 crores. Out of this, the company has received Rs 398.88 crores to date.

Fund Utilization

The company has utilized Rs 396.25 crores of the received funds across five key objectives:

Remaining Funds

The balance of Rs 2.63 crores from the received funds is currently held in fixed deposits.

Future Proceeds

An additional Rs 93.14 crores is expected from warrant holders, who have 18 months from the allotment date to convert their warrants into equity shares.

Monitoring Agency Assessment

CRISIL Ratings, acting as the monitoring agency, reported no deviations from the disclosed objectives for fund utilization. This indicates that Kiri Industries is adhering to its stated plans for the preferential issue proceeds.

Implications

The strategic allocation of funds across various objectives suggests that Kiri Industries is focusing on strengthening its financial position, managing working capital, addressing legal matters, and supporting group companies. The substantial allocation towards debt repayment and working capital requirements, in particular, may indicate efforts to improve the company's operational efficiency and financial flexibility.

Investors and stakeholders may view this transparent reporting positively, as it demonstrates the company's commitment to utilizing the raised funds in line with its stated objectives.