After Kwality Dairy was booked for insolvency, the Committee of Creditors (CoC) has been waiting for the resolution plan of the same. Recent news on the issue says that the Haldiram’s has made a bid of Rs. 130 crore for the acquisition of the Kwality Dairy. The bid by Haldiram’s is reported to be the highest among others.
Kwality Dairy was taken to the National Company Law Tribunal (NCLT) by KKR & Co. after the former made a default on the loan amount. KKR & Co. had filed an application for the insolvency of Kwality in October 2018 under the Insolvency and Bankruptcy Code, 2016 and the order for the company’s insolvency was passed by NCLT- Delhi bench on December 11, 2018.
It is being said that the lenders of the insolvent company are very likely to accept the bid by Haldiram’s later this year. The creditors are expected to vote on the resolution plan in the third week of October this year.
Kwality Dairy had raised a loan of Rs. 300 crore from KKR India Financial Services. It also received an additional advancement of Rs. 220 crore making the total loan amount to Rs. 520 crore. Such heavy loan was raised by Kwality in order to expand its business and enter the consumer segment. On the default of this amount, the company was taken to NCLT for the initiation of its insolvency proceedings.
Shailendra Ajmera has been appointed as the Resolution Professional (RP) for carrying out the insolvency proceedings. He is a part of the consultancy firm Ernst and Young.
The Committee of Creditors met on Wednesday to decide on the stock valuation and discuss a proper resolution plan.
Kwality Dairy was engaged in the business of processing milk and manufacturing dairy products, including ghee, lassi, milk powder, etc. According to a report, the company has a total debt of Rs. 1,900 crore.