Haldiram Becomes the Only Bidder to Acquire Insolvency-Affected Kwality for ₹130 Crore
In a significant development, Delhi-based Haldiram Group has emerged as the sole bidder to acquire the debt-ridden dairy company, Kwality, in the ongoing insolvency process. The Haldiram Group has made an offer of approximately Rs 130 crore for the acquisition. The Committee of Creditors (CoC) is expected to vote on the resolution plan by the third week of October, which could mark the end of a prolonged insolvency battle for Kwality.
Kwality, a company engaged in milk processing and the manufacturing of dairy products like ghee, milk powders, lassi, chaach, and flavoured milk, has been facing financial distress due to accumulated debt. The company had raised Rs 300 crore in 2016 from global private equity player KKR India Financial Services and later received an additional Rs 220 crore commitment for expansion into the consumer segment. However, the company was unable to repay its growing liabilities, which led to the initiation of the insolvency process in December 2018.
Shailendra Ajmera, the resolution professional overseeing the insolvency proceedings, has guided the process since its start. The insolvency filing was triggered by a plea from KKR, who had invested in the company and later sought resolution due to unpaid dues. With a total debt of around Rs 1,900 crore, the lenders will face a substantial haircut on their investment. Despite the challenges, Haldiram’s bid represents a potential solution to the crisis.
Kwality operates two milk processing units, one in Softa, Haryana, and the other in Dibai, Uttar Pradesh, which play a crucial role in the production of dairy items for a vast consumer market. Haldiram, known for its expertise in food processing and manufacturing, could potentially streamline Kwality’s operations and revitalize its brand, ensuring stability for the workforce and improved access to dairy products for consumers across India.
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