Why beverage company Bira 91 is fighting with its lenders
What's the story
Japanese beverage giant Kirin Holdings and Indian investment firm Anicut Capital have taken control of The Beer Cafe, a pub chain owned by Bira 91's parent company B9 Beverages. The acquisition was made by invoking shares pledged as collateral against loans given to the struggling craft beer maker. This move has led to a dispute between B9 Beverages and its lenders.
Internal issues
Internal unrest at B9 Beverages
B9 Beverages has been facing internal unrest, with over 250 employees writing to the board and key investors demanding the removal of CEO Ankur Jain. The employees cited governance lapses, unpaid dues, delays in salary disbursement, pending vendor payments, and legal disputes with creditors as their main concerns. Despite these issues, Jain remains committed to his position at the company.
Shareholder shift
Kirin and Anicut take joint control of The Beer Cafe
B9 Beverages had pledged its shares in Better Than Before (BTB), the firm that operates The Beer Cafe, to raise funds. Now, both Kirin and Anicut have invoked these pledged shares, making them joint shareholders in BTB. This move is seen as a way to protect The Beer Cafe business and its employees amid fears of potential insolvency proceedings against B9 Beverages.
Legal dispute
Legal battle ensues over takeover
After the change in ownership, B9 Beverages has challenged the takeover in court. Jain alleged that some lenders have acted illegally and against contractual terms. The Delhi High Court issued an interim order on October 17, barring Anicut Capital from selling or creating any third-party interest in BTB shares while the matter is still pending.
Financial woes
Financial strain for B9 Beverages
B9 Beverages, which built one of India's fastest-growing craft beer brands, has been under financial strain for several quarters. The company posted a net loss of ₹748 crore in FY24 on revenue of ₹638 crore. Its accumulated losses stood at ₹1,904 crore as of March 31, 2024. Kirin Holdings owns about 20.1% stake in B9 Beverages while Peak XV Partners holds 14.6%.