A company backed by food entrepreneur Sadananda Maiya is set to take over Maiyas Beverages & Foods Pvt. Ltd, which he had earlier founded and which was dragged to bankruptcy court last year.
Akashika Foods Pvt. Ltd will take over Maiyas Beverages after the National Company Law Tribunal (NCLT) dismissed MTR Foods Pvt. Ltd’s allegations against the ready-to-eat packaged food maker.
Sadananda Maiya had started Maiyas Beverages in 2012, five years after his family sold MTR Foods to Norway’s Orkla. Maiyas Beverages landed in the NCLT after it defaulted on payments to its vendors as it faced a fund crunch following a tiff between the founder and its private equity investors Ascent Capital and Peepul Capital.
Both MTR and Akashika Foods, formed by former employees of Maiyas Beverages, had bid for the debt-laden company. As per a report by The Economic Times, Sadananda Maiya will be an external consultant and mentor to Akashika Foods. Other suitors for Maiyas Beverages included Sanjeev Goenka’s Guiltfree Industries, Haldiram’s Kamal Agrawal and Peepul Capital.
In April, the Committee of Creditors of Maiyas Beverages and interim resolution professional Ashish Kanodia approved the bankruptcy resolution plan submitted by Akashika Foods. The Rs 130-crore plan proposed 100% upfront payment to financial creditors, employees and corporate debtors.
However, MTR challenged the creditors’ decision in the NCLT’s Bengaluru bench. MTR alleged that Maiyas’ founder Sadananda Maiya had fraudulently sold the company’s restaurants subsidiary and rights to the brand in an undervalued transaction a month before the insolvency resolution process began.
MTR alleged that the total consideration for the restaurant sale and assignment of the brand was Rs 1.5 crore while the assets and turnover of Maiyas Restaurants were Rs 14.5 crore and Rs 33 crore, respectively.
However, the NCLT dismissed the allegations. It noted that the resolution professional and the creditors—which included ICICI Bank and Karnataka Bank—were of the opinion that the transactions were in order and did not violate the law.