Prab­hat Dairy to merge sub­sidiary with it­self

The Hindu Business Line - - NEWS -

Mum­bai-based Prab­hat Dairy, which sold its milk pro­cess­ing busi­ness to French dairy prod­ucts corporation Lac­talis, is plan­ning to merge its whol­ly­owned sub­sidiary Cheese Land Agro (In­dia) Pri­vate Ltd with it­self.

Cheese Land Agro holds a 71 per cent stake in Sun­fresh Agro In­dus­tries, a step-down sub­sidiary of Prab­hat Dairy, which holds the re­main­ing stake.

“The pro­ceeds from the sale of the dairy busi­ness will not be used for an­i­mal nu­tri­tion busi­ness, as we in­tend to pro­vide it to the share­hold­ers. The pro­mot­ers will be in­vest­ing their own money into an­i­mal nu­tri­tion busi­ness,” Vivek Nir­mal, Joint Man­ag­ing Di­rec­tor & CEO, Prab­hat Dairy, told Busi­nessLine.

How­ever, the com­pany is yet to fi­nalise the amount it in­tends to re­turn to share­hold­ers.

Prab­hat Dairy will also sell its en­tire stake in Sun­fresh Agro In­dus­tries, a step-down sub­sidiary, through a share pur­chase agree­ment

Prab­hat Dairy has con­vened a board meet­ing on Wed­nes­day to seek share­hold­ers’ ap­proval for the merger of Cheese Land Agro. In Jan­uary, Lac­talis en­tered into a de­fin­i­tive agree­ment to ac­quire Prab­hat Dairy’s milk pro­cess­ing busi­ness for about ₹1,700 crore ($238.31 mil­lion).

The French group will be mak­ing the ac­qui­si­tion through its wholly-owned In­dian sub­sidiary, Tiru­mala Milk Prod­ucts, by way of a slump sale.

Prab­hat Dairy will also sell its en­tire stake in Sun­fresh Agro In­dus­tries, the step-down sub­sidiary, through a share pur­chase agree­ment.

An­i­mal nu­tri­tion space

“Now, an­i­mal nu­tri­tion busi­ness is pretty small; in the next 2-3 years, we in­tend to make it big,” Nir­mal said.

In Jan­uary, Prab­hat Dairy had also en­tered into a strate­gic al­liance with Den­mark­based DLG Group, as part of its plans to foray into an­i­mal nu­tri­tion busi­ness.

Copen­hagen-head­quar­tered co-op­er­a­tive Dansk Land­brugs Grov­vare­sel­skab (of­fi­cially DLG Group) is into pro­duc­tion of high-qual­ity vi­ta­min-min­eral feeds and farm sup­plies.

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