Molson Coors saves Cobra
Molson Coors and Cobra Beer have set up a joint venture to take control of the lager brand following the appointment of PricewaterhouseCoopers, the accountant, as administrators at the end of May 2009.
Molson Coors has put up an estimated GBP 14 million (EUR 16.6 million) to pay off Cobra’s secured creditors and will now win control of a debt-free business.
The new joint venture will be owned 50.1 percent by Molson Coors and 49.9 percent by a new company controlled by Lord Bilimoria. Cobra Beer Partnership Ltd will own the world rights to Cobra – with the exception of the Indian Sub-Continent.
Cobra has won a significant following since Lord Bilimoria established the brand in 1989 in England, where it is sold in 6,000 predominantly Indian restaurants, but the entrepreneur’s decision to finance its growth by rolling over debts at increasingly high interest levels appears to have led to its demise, British media reported.
Last year, the company racked up losses of about GBP 16 million, reports suggest.
Lord Bilimoria, who will continue as Chairman of the company, has made large numbers of Cobra staff redundant in recent weeks in preparation for the sale of the brand. The lager will now be produced at Molson Coors’ breweries in the UK.
Pre-pack administrations can be controversial because they leave creditors facing unpaid bills. Unsecured creditors will get nothing.
Lord Bilimoria’s grand designs for the brand included expanding Cobra beer in India where he hoped to take 10 percent of the Sub-Continent’s market by 2012.
