NK Proteins puts itself up for sale

Both domestic and foreign companies are said to be in the fray to acquire the company, popular for its Tirupati brand of edible oil

Gujarat-based NK Proteins, an edible oil crushing company and a defaulter in the National Spot Exchange Ltd (NSEL) payment crisis, is up for sale, according to sources in the know. Promoters have offered to sell the company to raise funds to pay NSEL investors.

Tirupati, NK Proteins’ popular brand of edible oil, is also expected to be sold.

It is learnt the promoters have written to the Mumbai police, investigating the NSEL fraud, requesting its assets be unfrozen so that it could proceed with the sale. It isn’t known whether the company has approached the Maharashtra Protection of Interest of Depositors (MPID) court for the sale.

The company was declared a defaulter on paying Rs 969 crore to NSEL investors, which was borrowed on the NSEL platform. Nilesh K Patel, the company’s promoter, was arrested by the Economic Offences Wing of the Mumbai Police for being the largest borrower in the Rs 5,600-crore NSEL payment crisis. He was released on bail.

The company is understood to have appointed global consultancy firm PricewaterhouseCoopers to advise it on the sale. For 2012-13, the turnover of NK Proteins was Rs 2,858 crore; its net loss stood at Rs 7.29 crore.

Sources said both domestic and foreign multinationals were in the fray to acquire the company, popular for its Tirupati brand of edible oil.

“Since the properties of the borrower have already been attached, for the borrower to sell these requires permission from the MPID court, set up under the MPID Act. If the properties are sold, it can pay back NSEL investors, but if it isn’t, the MPID court will order auctioning of the properties. If the company is able to sell the assets, the money will go to an escrow account and will be used to make payments to NSEL investors,” said an official.

An emailed questionnaire sent to NK Proteins remained unanswered. On condition of anonymity, a company official said NK Proteins was considering all possible options. The company has crushing capacity of about 400 tonnes a day in Gujarat; it leases capacity of 900 tonnes a day. The company also has a plant in Maharashtra, with capacity of about 100 tonnes a day.