Kwality shares locked at 5% upper circuit as NCLT defers insolvency proceeding

Shares of packaged foods maker Kwality were locked in their 5 percent upper price band of Rs 1.87 on BSE, looking on course to extend the winning run into the seventh consecutive session on October 15.

In a regulatory filing on October 15, the company shared a National Company Law Tribunal (NCLT) order, delivered on September 6, in which NCLT extended the corporate insolvency resolution process (CIRP) for another 60 days.

“…Honourable National Company Law Tribunal, New Delhi, has extended the CIRP time period by another 60 days beyond the statutory period of 270 days in respect of the company in accordance with the provisions of Section 12 (2) of the Insolvency & Bankruptcy Code, 2016,” the company said in a regulatory filing.

Global private equity player, KKR had filed insolvency plea against Kwality.

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.

Meanwhile, Delhi-based Haldiram group has emerged as the sole bidder for acquiring debt-ridden dairy firm Kwality with an offer of around Rs 130 crore in the ongoing insolvency process, PTI reported on October 10.

The lenders are likely to vote on Haldiram’s bid later this month, the report added.

Shailendra Ajmera, who is part of a multinational consultancy firm EY, has been appointed as the resolution professional to conduct the insolvency proceedings, which started in December 2018 following an order of the National Company Law Tribunal (NCLT).

Kwality has a total debt of around Rs 1,900 crore, which means that lenders would have to take a significant haircut.

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.

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