27 March 2019: Dairy major Kwality posted Rs 1,500 crore losses for the quarter ended December, paced by provisions for doubtful debt and advances.
Such provisions of Rs 1,415 crore in the quarter reflected the company’s struggles with managing its receivables, as sales declined to Rs 1,976 crore for the nine months ended December 2018 from Rs 5,016 crore.
Net losses for the nine months were Rs 2,450 crore against a profit of Rs 69.82 crore during the same period in FY18. The company is unable to meet its financial obligations, including repayment of various loans and unpaid interest, said the auditor in its review report.
Shares of the KKR-backed company declined 93 per cent in the last one year from Rs 82 to Rs 6.46. Currently, promoter Sanjay Dhingra owns 24 per cent of Kwality.
KKR has filed an insolvency plea against the company. The private equity major invested Rs 520 crore in 2016 to finance Kwality’s expansion plans and help it enter the consumer segment.