Dairy company Kwality Ltd is raising an undisclosed amount in funding from media companies Bennett, Coleman & Co Ltd (BCCL) and HT Media Ltd. This is a rare instance of the two arch rivals investing together in a company.
In a disclosure to the Bombay Stock Exchange, Kwality Ltd, earlier known as Kwality Dairy India Ltd, said it will be raising the funds through an issue of preferential allotment of equity shares, convertible warrants and compulsory convertible debentures to both the companies.
However, the respective stakes of the two media companies were not immediately known. Email queries sent to Kwality, BCCL and HT Media didn’t elicit any immediate response.
The Delhi-based dairy firm had recently got approval from its board of directors to raise Rs 60 crore (about $9 million then). The company had, then, mentioned that it will be issuing the “shares/warrants/debentures to persons/entities other than the promoter group”.
Kwality produces a range of products, including ghee, flavoured milk, yogurts, butter, cheese and curd. In 1994, the former owners of Kwality had sold their ice-cream brand to Hindustan Unilever.
The company has six milk processing units in Uttar Pradesh, Haryana and Rajasthan, and retails products under its Dairy Best brand. Kwality also supplies to Mother Dairy, Cadbury’s and ice cream makers Vadilal Enterprises Ltd and Cream Bell.
Both HT and BCCL, also known as the Times Group, have emerged as one of the leading investors picking stakes in companies across various stages of their lifecycle. BCCL also runs an ad-for-equity division which has come up with an innovative model under it teams up with private equity firms and venture capital funds to invest in early-stage companies in return for providing advertising opportunities across its media platforms.
In an arrangement that could be the first of its kind globally, BCCL has partnered with some leading private equity and venture capital funds which grant BCCL a stake in their investee firms in return for advertisements and promotions across BCCL-owned media properties including its English dailies, TV channels, radio stations and a host of internet platforms, among others.
Since January, it has also backed ventures such as e-commerce startup for customisation of products icustommadeit.com, e-grocer TaziSabzi and O2O hyperlocal deals discovery platform FLIT.
HT Media, on the other hand, is relatively a new entrant in the ad-for-equity investment space. It recently invested in Singapore-based digital content firm Sports Asia Pte. Ltd.
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