Cobra Faces Pre-pack
Thursday, May 28, 2009 21:15
The cash crisis in the Indian lager group run by Lord Bilimoria—Cobra Beer, is expected to lead to a company voluntary arrangement or a pre-pack administration as the company is restructured before a sale.
It is understood to be close to selling the Cobra brand in the UK to a new joint venture controlled by Molson Coors, which is the American brewer behind the Carling and Worthington brands.
A mooted sale of the smaller Indian business to Wilbur Ross, the wealthy American investor, is understood to have hit a wall and alternative options, including a refinancing, are being considered. It has also launched a restructuring to reduce costs, scaling down its presence from 24 states to 13, renegotiating its brewing and distribution arrangements and halving its staff.
Negotiations over the sale of the British business have been complicated by mounting losses. While the main business supplying Indian restaurants is performing well, it has sought to buy market share in the pub and retail sectors with low pricing, while spending heavily on marketing.
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