- Kwality owes Rs 1,969 crore to its lenders.
- Kwality Dairy posted a loss of Rs 1,500 crore in the quarter ended December.
- Haldiram Snacks supplied Rs 128 crore, which means creditors will have to take over 93% of the haircut.
Haldiram Snacks and Pioneer Securities has bid for Kwality, providing economic creditors only a little over 6 percent of the complete dues of the strained dairy product maker, an individual aware of the development said.
Kwality owes Rs 1,969 crore to its lenders and Haldiram Snacks supplied Rs 128 crore, which means creditors will have to take over 93% of the haircut. The homegrown sweets and snacks maker has lined up another Rs 3 crore to settle claims from operational creditors as well as employees and employees.
Several major companies that had earlier shown interest in the ailing dairy product maker initially included Aion-affiliate Arcion Revitalisation, TPG Capital, IndiaRF — a JV between Piramal Enterprises and Bain Capital, India Resurgent Fund and JK Group’s LVP Foods. But, only Haldiram did finally submit a binding bid.
Earlier, Kwality Dairy did post a loss of Rs 1,500 crore in the quarter ended December.
Kwality has operated as a business-to-business provider after selling its ice cream brand to consumer goods main Hindustan Unilever in 1994, while it creates milk, ghee, butter, milk powder, curd, yogurt and cheese under the brand Dairy Best in consumer space.
The sales of the ailing company decreased from Rs 5,016 crore a year ago to Rs 1,976 crore in the nine months ended December, while it posted a net loss of Rs 2,450 crore against a profit of Rs 69,82 crore.
The failure to satisfy economic commitments, including repayment of multiple debts and unpaid interest and the failure of promoters to bring in new assets are reasons why the market value and economic results of Kwality have declined significantly over the previous year,” a representative said.
Kwality Dairy, established in 1992, can process about 3 million liters of milk per day, according to data on its website. It has six production units, says the website, spread across Uttar Pradesh, Haryana, and Rajasthan.