Kwality, the India-based dairy business, said today (17 October) it is the subject of a bankruptcy petition filed before the country’s National Company Law Tribunal.

In a stock-exchange filing, Kwality said a unit of US private-equity giant KKR, which invested in the business in 2016.

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Kolkata-headquartered Kwality added it did not know whether the tribunal had admitted the petition.

The stock-exchange filing made no mention if KKR had disclosed any reasons for submitting the petition. 

Approached by just-food, a spokesperson for KKR said: “KKR provided credit to Kwality Limited, which regrettably defaulted on its payments. In order to protect our interests as a creditor and ensure an orderly resolution to maximise value, we have made a filing under the Corporate Insolvency Resolution Process, via the NCLT. We have no further comments regarding this matter.”

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Unnamed banking sources have told The Hindu Business Line publication Kwality has debt of around INR20bn (US$271.8m).

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Last month, when Kwality issued the financial results for the first quarter of its financial year – a three-month period that ran to the end of June – it said it was “currently facing an issue of receivables management”.

It stated: “This started when the company could not service its customers with the required goods due to liquidity crunch, a situation that emerged primarily towards the end of the quarter triggered due to non-disbursement of sanctioned working capital from banking partners. This impacted the company’s plans to monetise its investment already made on setting up a new facility dedicated for high-margin, value-added products.”

In Kwality’s last full financial year, which ran until the end of March, it generated turnover of INR67.25bn, up from INR61.31bn a year earlier.

Profit after tax stood at INR711.1m, against INR1.64bn the previous year.