Maiyas Foods troubles reach law tribunal

Sadananda Maiya’s food venture, Maiyas Beverages, and Foods has been referred to the Bengaluru bench of the National Company Law Tribunal after one of its vendors, MR Betegeri, moved the court to recover pending dues.

The tribunal on Monday appointed Ashish Kanodia interim resolution professional to carry out functions under the Insolvency and Bankruptcy Code.

Some investors in talks with Maiya for a bailout 

The management of the company will now vest with the IRP, and the powers of the board stand suspended. The development indicates the company could be headed to liquidation or could be referred to a committee of creditors to revive the business with existing investors or a new set of suitors. Vendors caught in the tussle between the promoter and investors have expressed support for Maiya even though the company owes them Rs 65 crore.

Some investors have been in discussions with Maiya for a bailout of the business and to chalk out a safe exit option. But with the case admitted before the NCLT, the business could take a new course altogether.

When TOI contacted Peepul Capital, a major investor in Maiyas, its investment director Deepak Mittal said Peepul Capital has been absolutely keen to revive the company and take it back on the successful journey it was on till a few months ago. “We had presented a concrete plan to other shareholders towards reviving the company. We will strive for a revival of the company through the NCLT process or otherwise,” he said.

Ties between the two private equity investors — Peepul Capital and Ascent Capital — and promoter Maiya became strained a few months ago after rumors started about a hostile takeover brewing in the company. Peepul Capital and Ascent Capital each own 30% stake, and the Maiya family have the remaining 40%.

Maiya, 67, had previously promoted the packaged foods brand MTR. In 2007, he sold it to Norwegian food giant Orkla. He launched Maiyas in 2012 after his no-compete agreement with Orkla ended. He raised capital from Ascent Capital and Peepul. The two investors have so far pumped in Rs 280 crore.

The company is struggling to pay salaries of its 350-odd employees and some of them said the dues haven’t been cleared for the past three months. Maiyas’ factory in Bengaluru halted production in April and its products are out of stock across most retailers as the working capital required to keep the factory running dried up following the conflict. With NCLT burdened with numerous cases in recent months, it is difficult to say how long the process will take.

Maiyas had clocked Rs 124.43 crore in revenue from the sale of products in 2015-16, up from Rs 101.99 crore in the year before. The company’s losses narrowed to Rs 61.98 crore in that year, from Rs 74.39 crore.

Source:-https://retail.economictimes.indiatimes.com/news/food-entertainment/food-services/maiyas-foods-troubles-reach-law-tribunal/65225354

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