Tilaknagar Industries Concludes Financial Revamp

Tilaknagar Industries Concludes Financial Revamp

Mumbai, August 12, 2023: Tilaknagar Industries Limited (TI) (BSE: 507205) (NSE: TI), today announced the prepayment of its restructured debt to Edelweiss Asset Reconstruction Company (EARC), signaling the end of the financial reconstruction phase for the country’s largest premium brandy maker. Accordingly, the total restructured debt of Rs. 176.22 crore as on June 30, 2023 now stands extinguished.

Consequent to the above prepayment, the corresponding balance debt of EARC amounting to Rs. 3.62 crore has been waived by EARC and the same shall be written back by the company.

The prepayment has been funded by a debt of Rs 130 crore from Kotak Mahindra Bank Limited as well as internal accruals of the company.

The company has now completely repaid the restructured debt in terms of the Master Restructuring Agreement of February 2020 and stands discharged of all liabilities, dues, demands or claims in respect of the restructured facilities.

The EARC debt prepayment marks Tilaknagar Industries’ return to normal banking channels for finance that would offer the company increased flexibility in managing cash flows.

Making a complete turnaround after going through a period of financial stress that lasted till a couple of years ago, Tilaknagar Industries has successfully reduced its gross debt from nearly Rs.1,200 crore as of March 2019 to Rs. 239 crore as on June 30, 2023. The company aims to go net-debt free by March 2025.

As part of the financial restructuring exercise, the company had entered into an agreement with Edelweiss Asset Reconstruction Company (EARC) in February 2020 wherein total loans of Rs. 523.32 crore were restructured at Rs 344.47 crore at an interest rate of nine per cent, with balance debt of Rs. 178.85 crore. “As we conclude our financial revamp, we are glad to acknowledge the constructive cooperation we received from a very competent team of professionals at EARC” said Mr Amit Dahanukar, Chairman and Managing Director, Tilaknagar Industries Limited.

The reduction of debt has been achieved through a combination of internal accruals as well as funds raised by the company through preferential issue of equity over the past couple of years. As a result, the finance costs have declined significantly, leading to incremental cash flow generation. “The financial turnaround was aided by a business strategy that focussed on volume growth, margin expansion through better product mix, following an asset-light model and through all-around cost-saving initiatives,” added Mr Dahanukar.

For Q1 FY24, Tilaknagar Industries reported a 33 per cent year-on-year rise in net revenue to Rs 304.1 crore while the Profit After Tax (PAT) stood at Rs 25.7 crore in the quarter ended June 30, 2023 as against a PAT of Rs 1.0 crore reported in the corresponding quarter a year ago. Despite persistent inflationary pressures, the company’s EBITDA margins expanded by over 300 basis points compared to the same period last year. The company achieved a substantial year-on-year sales volume growth of 42 per cent against an overall IMFL industry growth of nearly 5 per cent.

Tilaknagar Industries’ flagship brand Mansion House Brandy has become the world’s fastest-growing brandy and the second-fastest-growing alcoholic beverage brand across categories, globally, as per ‘The Millionaires’ Club 2023’ report released by leading trade journal Drinks International.