Now, upGrad Files Insolvency Petition Against Bira91 Over ₹1.02 Cr Dues

upGrad has filed an insolvency petition against B9 Beverages Ltd, the maker of Bira91 beer, over alleged unpaid dues of ₹1.02 Cr, adding to the financial and legal challenges facing the brewer.

The petition, filed under Section 9 of the Insolvency and Bankruptcy Code (IBC), 2016, was submitted to the Delhi bench of the NCLT on October 22, as per documents reviewed by Moneycontrol.

upGrad has named B9 Beverages as the corporate debtor and sought the initiation of the corporate insolvency resolution process (CIRP) to recover the outstanding amount.

The petition does not disclose the nature of services provided by upGrad to the beverage maker.

Inc42 has reached out to upGrad and Anicut Capital for a comment on the development. The story will be updated on receiving a response.

The filing comes amid mounting liabilities and creditor disputes at B9 Beverages, which is facing insolvency-related action from multiple creditors.

In September, the NCLT directed B9 Beverages and its creditors to explore a settlement through mediation in connection with multiple insolvency proceedings. The tribunal also restrained the brewer from disposing of its assets while discussions were underway.

The company has also faced action from glass manufacturer Hindusthan National Glass & Industries Ltd (HNGIL), which sought to recover ₹11.8 Cr in alleged unpaid dues.

HNGIL issued a demand notice under Section 8 of the IBC over customised glass bottles manufactured against confirmed purchase orders but allegedly not collected by the brewer. The glassmaker claimed that more than 51 Lakh bottles worth over ₹7 Cr remained stored at its facilities, despite it encashing bank guarantees worth ₹3.91 Cr.

The latest development comes as the startup attempts to restructure its business amid a prolonged financial crisis.

In July, founder Ankur Jain stepped down from the company’s board and relinquished executive control and ownership following a dispute with investors and lenders.

VC firm Anicut Capital, one of Bira’s key lenders, subsequently took control of Jain and his family’s stake in the company, as per reports. 

Anicut had extended loans to B9 Beverages between 2017 and 2022, secured against the promoter family’s stake.

The brewer is now expected to be recapitalised by existing investors and lenders under a revival plan aimed at clearing statutory, employee and vendor dues and restarting operations.

Founded by Jain in 2015, Bira 91 raised more than $200 Mn from investors. Its annual revenue crossed $100 Mn in FY23. Its shareholders include Peak XV Partners, Sofina and Japan-based Kirin Holdings. Anicut Capital and Hero Corporate Services’ family office are among its key lenders.

Its troubles began after it converted into a public company, triggering fresh excise approval requirements across multiple states. This disrupted the production and sales of the beer. The company subsequently wrote off inventory worth around ₹80 Cr and fell behind on vendor payments.

The company eventually paused its packaged beer business amid a prolonged funding crunch, mounting vendor liabilities and difficulties in meeting employee and statutory obligations.

The company reported a net loss of ₹748 Cr in FY24, with accumulated losses of ₹2,117.9 Cr. Its auditor also warned that current liabilities exceeded assets by ₹487 Cr as of March 2024.

Under Section 9 of the IBC, an operational creditor can approach the NCLT to initiate insolvency proceedings after serving a demand notice and meeting the prescribed statutory conditions.

However, filing a petition does not automatically trigger insolvency proceedings. The NCLT will examine the application to determine whether the requirements for admission have been met. 

The post Now, upGrad Files Insolvency Petition Against Bira91 Over ₹1.02 Cr Dues appeared first on Inc42 Media.