Haldiram have submitted expressions of interest to buy out loss-making Kwality Dairy which is facing insolvency proceedings, as confirmed by the two officials who were aware of the developments.
The bidders for Kwality Dairy include: TPG Capital; Aion affiliate; Arcion Revitalisation; IndiaRF — a joint venture between Piramal Enterprises and Bain Capital Credit; Haldiram Snacks; and JK Group’s LVP Foods.
Last year, the private equity firm KKR, which invested Rs 520 crore in 2016 to finance Kwality Dairy’s plans to enter the consumer segment, started bankruptcy proceedings against the struggling dairy maker. The bids have been submitted to Shailendra Ajmera of EY, who is the resolution professional for Kwality Dairy. The last date for the bids was March 31.
One official said in a statement, “The resolution plan has to be submitted by May 15 and the total financial creditor claim submitted is Rs 2,100 crore.”
Kwality Dairy posted a loss of Rs 1,500 crore in the quarter ended December.
Kwality has operated as a business-to-business supplier, after selling its ice-cream brand to consumer goods major Hindustan Unilever in 1994. While in the consumer space, it produces milk, ghee, butter, milk powder, curd, yogurt and cheese under the brand Dairy Best.
The company’s sales declined to Rs 1,976 crore in the nine months ended December from Rs 5,016 crore a year earlier, while it posted a net loss of Rs 2,450 crore against a profit of Rs 69.82 crore.
The official said, “Inability to meet financial obligations, including repayment of various loans and unpaid interest, and promoters not being able to bring in fresh capital are reasons why Kwality’s market value and financial performance have declined considerably over the past year.”