In a strategic move aimed at financial consolidation, Future Consumer Ltd. has officially announced the sale of its dairy division, Nilgiri Dairy Farm, to AVA Cholayil Healthcare for a total consideration of INR 67 crore. This transaction is anticipated to bolster Future Consumer’s financial position by unlocking the value of its assets and addressing its prevailing debt concerns.
The comprehensive sale encompasses the seamless transfer of all operations associated with Nilgiri Dairy Farm’s dairy business, encompassing franchise operations, retail trade activities, and the entire spectrum of functions spanning sourcing, processing, packaging, and marketing of dairy products, bakery items, fast-moving consumer goods (FMCG), staples, and various other merchandise.
Under the agreement, Future Consumer has formally entered into a “transfer agreement for the transfer of the entire business undertaking of ‘The Nilgiri Dairy Farm Pvt. Ltd. (NDFPL). This encompassing transfer includes franchise operations, retail trade functions, and the intricate processes related to the sourcing, processing, packaging, and marketing of an extensive array of products, spanning dairy goods, bakery items (excluding the cookie plant), FMCG, staples, and more.
This strategic monetization move is pivotal for Future Consumer Ltd. (FCL), a company engaged in the manufacturing, branding, and distribution of FMCG and processed food products. FCL has faced multiple defaults concerning principal and interest payments on non-convertible debt (NCDs).
The decision to divest Nilgiri Dairy Farm was unanimously approved by the board of the Future Group’s FMCG arm during a meeting held on Tuesday. AVA Cholayil Healthcare, the acquiring entity, is actively involved in the manufacturing, marketing, and distribution of personal care and food products while also managing a network of wellness clinics and hospitals.
The transaction’s purchase consideration of INR 67 crore will be disbursed in three installments, contingent upon the fulfilment of specific conditions. Nevertheless, it is imperative to note that the deal remains “subject to obtaining all necessary consents and approvals, including those from the lenders and shareholders of the company, in accordance with applicable laws and regulations.”
Nilgiri Dairy Farm Pvt. Ltd. (NDFPL) specializes in manufacturing, marketing, and distributing dairy and bakery products, along with procuring various FMCG and staple items for distribution and sale through its franchisee-operated retail outlets. NDFPL reported a turnover of INR 39.65 crore, constituting 10.40% of the consolidated turnover of Future Consumer.
It’s noteworthy that in 2014, Future Consumer Ltd. acquired NDFPL and its subsidiary, Nilgiri’s convenience store chain, for approximately INR 300 crore, marking a pivotal chapter in the company’s diversification journey.