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