Prabhat Dairy has obtained shareholders’ nod to sell its dairy business to French firm Groupe Lactalis. The company on Thursday made the voting results public.
The resolution for “sale of entire investments (equity and preference) in its subsidiary Sunfresh Agro Industries to Tirumala Milk Products, and sale of dairy business undertaking of the company to Sunfresh Agro Industries and Tirumala Milk Products” obtained 92 per cent votes in favour.
Proxy advisory firms had termed the resolution as controversial and recommended investors to vote against it.
Interestingly, 99 per cent public institutions voted against the resolution but the promoter group and non-institutional investors voted in favour. “While promoters were expected to vote in favour of the transaction, the resolution could have been defeated had all the public shareholders voted against it,” said a fund manager.
Sunfresh Agro and the dairy business of Prabhat collectively account for 98 per cent of the company’s consolidated revenues. Some investors had raised concerns over the future of Prabhat Dairy after the sale of its dairy business, as it contributed to bulk of its revenues.
“The company has not disclosed any future plans that how the company will proceed with remaining 2 per cent business… How the company will survive/grow when almost nothing remains in the company,” proxy advisory firm Stakeholders Empowerment Services (SES) had said in a note.