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Kwality insolvency: Lenders reject Haldiram's bid
PTI
Last Updated IST

Lenders of Kwality Ltd have rejected the Rs 142 crore bid of Delhi-based Haldiram Snacks, which emerged as the sole bidder to acquire the debt-ridden dairy firm.

After rejection of its bid, Haldiram Snacks has revised its offer marginally and also approached the National Company Law Tribunal (NCLT), Delhi with a plea that its latest resolution plan should be considered by the lenders as the offer is higher than the liquidation value.

Earlier on November 2, the Committee of Creditors (CoC) rejected the bid of Haldiram Snacks' Rs 142 crore, as only about 40 per cent of the lenders voted in favour of the resolution plan as against the requirement of 66 per cent. Kwality has a total debt of around Rs 1,900 crore.

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Haldiram Snacks had earmarked Rs 135.64 crore for the financial creditors out of its total offer of Rs 141.59 crore to acquire Kwality Ltd.

In 2018, the NCLT ordered insolvency proceedings in Kwality on a petition filed by global private equity firm KKR. Shailendra Ajmera, who is part of multinational consultancy firm EY, has been appointed as the resolution professional to conduct the insolvency proceedings.

Post rejection of its offer, Haldiram wrote a letter on November 4 to IRP, revising its offer to Rs 139 crore for financial creditors, taking the total value of the bid to Rs 144.95 crore.

Haldiram has filed a petition before the NCLT, requesting that RP should be directed to place the revised bid before the COC for consideration.

"The value offered by it to the financial creditors in its resolution plan is higher than the potential fair liquidation value of the corporate debtor," the company said.

It has requested NCLT to direct the resolution professional to place the latest offer before the CoC for consideration.

"The said letter (November 4, 2019) offers an increase in the offer value to financial creditors by Rs 3.3 crore to Rs 139 crore from Rs 135.64 crore and consequently, the total offer value to Rs 144.95 crore," it said.

Haldiram also added that its improved offer "will help financial creditors derive a much better value they can hope to realise in the event corporat debtor (Kwality) is put into liquidation".

It has also asked NCLT to direct to provide the minutes of the CoC meeting, where its bid was rejected, and also reason for each lenders for rejection of the bid.

The matter is scheduled to be heard next week at NCLT.

In 2016, Kwality had raised Rs 300 crore from KKR India Financial Services and got additional commitment of Rs 220 crore. The amount was raised to fund its expansion plans and enter into consumer segment.

The company is engaged in the business of milk processing and manufacturing of dairy products, including ghee, milk powders, lassi, chaach and flavoured milk. It owns two milk processing units, one in Softa, Haryana, and another in Dibai, Uttar Pradesh.

Haldiram sells sweets and other snacks through its own outlets as well as retail chain.

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(Published 08 November 2019, 20:16 IST)