The National Company Law Tribunal (NCLT) has directed the lenders of Kwality to reconsider the revised Rs 145-crore offer by Haldiram Snacks to acquire the debt-ridden dairy firm. The Delhi-based bench of the tribunal has also extended the Corporate Insolvency Resolution period by another three weeks and directed the Committee of Creditor (CoC) to reconsider the enhanced offer.
Earlier, the lenders of Kwality had rejected the Rs 142 crore bid of Delhi-based Haldiram Snacks, which emerged as the sole bidder to acquire the debt-ridden dairy firm. Following this, Haldiram Snacks had revised its offer marginally and approached the NCLT with a plea that its latest resolution plan should be considered by the lenders as the offer is higher than the liquidation value.
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 a multinational consultancy firm EY, has been appointed as the resolution professional to conduct the insolvency proceedings.
On November 2, the CoC had rejected Haldiram Snacks’ Rs 142 crore resolution plan, as only about 40% of lenders voted in favor of the resolution plan as against the requirement of 66%. Kwality has a total debt of around Rs 1,900 crore.
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. Post rejection of its offer, Haldiram had written a letter on November 4 to the insolvency resolution process, 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 resolution professional should be directed to place the revised bid before the COC for consideration. It had requested the 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 had said.
Haldiram also mentioned that its improved offer and added, “We will help financial creditors derive a much better value they can hope to realize in the event corporate debtor (Kwality) is put into liquidation”.
In 2016, Kwality had raised Rs 300 crore from KKR India Financial Services and got an additional commitment of Rs 220 crore. The amount was raised to fund its expansion plans and enter into the consumer segment.
The company is engaged in the business of milk processing and manufacturing of dairy products, including ghee, milk powders, lassi, chaach, and flavored 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 outlets as well as the retail chain.