Syska LED Insolvency Process Attracts Four Bidders Including Promoter and Mutares Group

The insolvency resolution process of Syska LED Lights has drawn significant interest from four potential bidders, marking a crucial phase in the financial restructuring of the once-prominent LED manufacturer. The bidding process has attracted both domestic and international players seeking to acquire the financially distressed company.

Bidder Profile and Financial Exposure

The four parties that have expressed interest include the company's promoter, Germany-based turnaround investor Mutares Group, Aikyam Stressed Asset Fund, and Cyfuture India. The company has admitted total claims of ₹226.00 crore from its creditors.

Documentation Concerns and Process Status

Lenders have raised concerns regarding the validity of certain bids due to the absence of formal board authorization from one of the bidders. According to sources familiar with the matter, while documents have been shared electronically, the lack of board-approved authorization from one bidder is considered unusual at this stage and could potentially become a disqualifying issue if not resolved promptly.

The resolution process has progressed to an advanced stage, with a second round of bids currently underway. Lenders expect recoveries to exceed 50% of admitted claims, subject to final negotiations and approval by the committee of creditors.

MSME Provisions and Promoter Participation

The company's promoter has submitted a bid under the MSME provisions of the Insolvency and Bankruptcy Code, which permits promoters of eligible micro, small and medium enterprises to participate in the resolution process. Banking sources indicate that promoter participation is often viewed positively in MSME cases, as it can facilitate smoother business continuity and operational knowledge retention.

Company Background and Operations

Syska LED Lights operates in the trading and manufacturing of LED lights, personal grooming products, irons, fans, and home wires under the SYSKA brand name. The company maintains manufacturing facilities in Rabale and Chakan in Maharashtra.

Once a leading consumer lighting brand, Syska LED encountered financial difficulties due to intense market competition, margin pressure, and working capital constraints. These factors collectively contributed to the company's current financial distress and subsequent entry into the insolvency resolution process.

Expected Timeline and Next Steps

The resolution professional is expected to present compliant resolution plans to lenders after addressing the documentation issues. The process is anticipated to conclude in the coming months, with final approval dependent on the committee of creditors' decision and successful resolution of any outstanding compliance matters.