One of the oldest brands of packaged flour in India, 'Shakti Bhog' may soon be back in the market. For this, apart from ITC Limited, which makes flour under the brand name 'Aashirwad', two more companies are in the fray.
The 'Shakti Bhog' flour, which disappeared some time back from the locality shops, may soon make a comeback in the market. For this, ITC Limited, once a competitor of 'Shakti Bhog', is standing firm in the field. At the same time, two more companies are also running their bets. 'Shakti Bhog' is currently facing bankruptcy process. The company has defaulted a bank loan of Rs 7,000 crore.
'Shakti Bhog' is one of the oldest brand of packed flour in India. Now ITC Limited, the owner of 'Aashirwad' brand, has shown interest in acquiring Shakti Bhog Foods. Apart from this, two other companies have also presented a resolution plan in the National Company Law Tribunal (NCLT) for the enjoyment of power.
These two companies are also in the fray
Apart from ITC Limited, Vidya Polymers and Shanti GD Ispat & Power Limited are also interested in buying 'Shakti Bhog'. According to sources, these two companies have also shown interest in acquiring Shakti Bhog Foods. ITC Limited has talked about buying only 'Shakti Bhog' brand in its resolution plan. While the rest of the two companies have plans for complete acquisition of Shakti Bhog.
Normally, bankers of a company being sold under the insolvency process always prefer a resolution plan involving a complete takeover. However, the spokesperson of ITC Limited refused to say anything regarding the acquisition of Shakti Bhog, citing market estimates. While two other companies have also not given any statement.
Property is not left, only 'brand' is left
Shakti Bhog Foods has defaulted a bank loan of Rs 7,000 crore. In this, the loan of State Bank of India (SBI) is only about Rs 4700 crore. These loans were issued by SBI on behalf of its associate banks - State Bank of Patiala, State Bank of Mysore, State Bank of Bikaner and Jaipur and State Bank of Travancore.
Apart from this, the lenders to the company include Union Bank of India, Punjab National Bank and Standard Chartered Bank. Under the insolvency process, on the request of banks, NCLT asks for a plan to buy the bankrupt company from another company. In this, the property of the company also gets transferred to the new company. According to media reports, the situation in the case of Shakti Bhog is such that the company has hardly any assets left, only its brand name is left.
The CBI and ED are also probing the bank loan default against Kewal Krishna Kumar, former chairman and MD of Shakti Bhog Foods.
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