Sarda Mines top bidder for Kwality Dairy

Sarda Mines, one of the largest suppliers of iron ore to Jindal Steel and Power Limited (JSPL), has emerged as the winning bidder for

Kwality Dairy

after the milk and dairy products manufacturer was put on auction through an e-bidding process, according to people in the know. Sarda Mines won the e-bid process with an offer of Rs. 121 crore, said the people.

The bid is subject to a final approval from the National Company Law Tribunal (NCLT).

JSPL did not respond to ET’s queries till press time. Sarda Mines could not be reached for comment.

Kwality Dairy’s official liquidator, Shailendra Ajmera of EY, declined to comment when contacted.

Ajmera was originally appointed as the resolution professional of Kwality Dairy by the NCLT in 2018 when private equity firm KKR dragged the company for bankruptcy proceedings over loan defaults.

Though JSPL does not directly own a stake in Sarda Mines, the Odisha-based mining company is a supplier of iron ore to its steel plants. Sarda Mines recently purchased a 0.52% stake in JSPL through bulk deals.

Haldiram’s and French dairy firm Lactalis were among those also interested in buying Kwality Dairy. Haldiram’s had made an offer of ₹144 crore to creditors but it was rejected and they chose to send the company into liquidation and put it through an e-auction.

Delhi-based Kwality Dairy was originally set up as a backward integration facility to supply milk for making ice creams that were sold under the Kwality brand. Hindustan Unilever acquired the Kwality ice creams brand from its original owners, the family of Iqbal Ghai and PL Lamba, in 1994.

Sarda Mines was recently granted relief by the Supreme Court which allowed JSPL to lift iron ore from Sarda Mines provided Sarda Mines pays a fine for mining without requisite environmental clearances.

Odisha’s mining department in March 2014 had directed Sarda Mines to stop all mining activities on the ground that its environment clearance had expired and had also refused to give transit permit to JSPL for transportation of the procured and processed iron ore.

The state government had also levelled charges that Sarda was selling iron ore to JSPL way below the market rate.

The MB Shah Commission and the Central Empowered Committee had also raised various objections on the nature of relationship between Sarda Mines and JSPL claiming the latter was benefiting from subsidised material from Sarda which was costing the state exchequer.

( Originally published on Sep 28, 2021 )