Law tribunal invites bids for Maiyas Foods

Law tribunal

The National Company Law Tribunal (NCLT) has called for bids from potential investors for Sadananda Maiya’s food venture Maiyas Beverages and Foods. NCLT has asked potential investors to submit a plan to resurrect the company. The company was referred to NCLT earlier this year following its inability to raise enough funds to continue operations. The Maiya family, which previously had founded the food brand MTR, owns 40% of the shares in the company, with the rest held equally between private equity firms Peepul Capital and Ascent Capital. There have been differences between the Maiya family and the PE firms on how to take the business forward. The NCLT move suggests that no internal resolution has emerged. Maiyas’ products are out of stock with the retailers Maiyas’ products include snacks, sweets, instant mixes, spices, ready-toeat foods and frozen foods. Its factory in Bengaluru halted production in April.

Its products are out of stock across most retailers. The six-yearold company had around 350 people in its factory alone. Peepul’s Deepak Mittal declined to comment on the latest development, saying that court proceedings are under way. Text messages to Sudarshan Maiya, Sadananda Maiya’s son who has been playing a major role in the business, did not elicit a response. NCLT had suspended the powers of the board and had appointed an interim resolution professional (IRP) whose responsibility was to manage the company. The tribunal has invited bids from three categories of investors – private/public limited company with a net worth of Rs 200 crore; PE funds/institutional investors with Rs 200 crore or more of assets under management; individual investors or consortium of HNIs with a net worth of Rs 125 crore. Qualified and shortlisted parties will be informed on or before December 8, the NCLT note said. Maiya sold MTR in 2007 to the Norwegian food company Orkla. He started Maiyas five years later when his nocompete agreement with Orkla ended. Ascent Capital and Peepul Capital together pumped in about Rs 280 crore. The company has debt of around Rs 150 crore from lenders and distributors.

“The company in its hey days did a business of Rs 22 crore a month. This has dramatically reduced to Rs 5 crore in the last two months. There is hope for a revival,” said a source close to the development. Maiyas had Rs 124.43 crore in revenue from sale of products and losses of Rs 61.98 crore in 2015-16, the last year for which results are available.

Source : timesofindia.indiatimes.com

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