Edelweiss Asset Reconstruction Company Ltd has completed its acquisition of a minority stake in Tilaknagar Industries Ltd as part of efforts to restructure the alcoholic beverages maker’s debt.
The Mumbai-based ARC, which holds security receipts of the company, now owns 10% stake in the publicly listed liquor firm and maker of Mansion House brandy.
Last month, the board of Ahmednagar-registered Tilaknagar Industries approved a preferential share allotment to Edelweiss ARC. The acquisition through the allotment took place on May 28.
Tilaknagar Industries had entered into a long restructuring agreement with Edelweiss ARC wherein total loans of Rs 523 crore were restructured at Rs 344 crore at an interest rate of 9%.
In November, the share allotment for converting part of the debt that the company owes to the ARC was announced in a public disclosure.
After the debt restructuring agreement, the shares of Tilaknagar Industries have bounced back hitting a five-year high on the stock exchanges.
In April 2021, the company signed a 10-year deal with French distiller giant Pernod Ricard. As part of the long-term agreement, Tilaknagar Industries will produce the maker’s flagship brands at its unit in Ahmednagar.
The association may also be extended to more states in the near future.
Pernod Ricard’s premium and semi-premium brands include Blenders Pride, Royal Stag and Imperial Blue.
Founded in 1933 by Mahadev L Dahanukar as Maharashtra Sugar Mills, the firm was renamed as Tilaknagar Industries in honour of freedom fighter Bal Gangadhar Tilak.
Led by Amit Dahnukar, Tilaknagar Industries is now among India's 10 largest distillers.
For the March quarter of 2021, it reported a net loss of Rs 9 crore as against a net profit of Rs 380 crore a year ago.
Its sales rose 23% to Rs 192 crore during the period. For 2020-21, net loss reported was Rs 38 crore versus a net profit of Rs 269.73 crore a year ago. Sales dipped 16% during the period.