Himalaya Food International Limited has disclosed its decision to initiate arbitration proceedings against Simplot, seeking substantial damages for non-compliance with a previous arbitration award. The company made this announcement through an investor disclosure dated April 7, 2026, pursuant to Regulation 30 of SEBI listing requirements.

Background of the Dispute

The current legal action stems from Simplot's failure to comply with the SIAC Final Award dated March 23, 2020. According to the award, Simplot was required to return critical machinery within 21 days, with the deadline falling on April 14, 2020. Despite the company's earlier issuance of a Notice of Dispute regarding this non-compliance, Simplot has continued to retain the machinery.

Arbitration Details and Financial Claims

Himalaya Food International is now proceeding to file a Notice of Arbitration (NOA) before the Singapore International Arbitration Centre, seeking comprehensive damages for the prolonged non-return of machinery.

The company has reserved its right to claim further compensation until the final resolution of the matter, indicating potential for additional claims beyond the current ₹72 crore demand.

Strategic Approach and Authorization

The Board of Directors has resolved to pursue the Simplot dispute towards a logical conclusion, including exploring the possibility of a global settlement. Mr. Sanjiv Kakkar has been specifically authorized to take all necessary steps to ensure efficient resolution of the matter within the current financial year.

Additionally, the company has requested SIAC to determine the value of the critical and custom-made equipment not returned by Simplot for the purpose of set-off before the Delhi High Court, suggesting parallel legal proceedings in Indian courts.

Funding and Compliance Considerations

Himalaya Food International is exploring various funding options for the litigation, including contingent fee arrangements, while ensuring compliance with applicable norms in Singapore. This approach indicates the company's commitment to pursuing the matter while managing financial risks associated with international arbitration proceedings.

The disclosure emphasizes the company's determination to recover the machinery and seek appropriate compensation for the extended period of non-compliance, which has reportedly impacted production capabilities and profitability over multiple financial years.

Himalaya Food International Ltd. has announced a significant breakthrough in its financial restructuring with the approval of an extension for its One Time Settlement (OTS) from a consortium of lenders led by State Bank of India. The development marks a crucial milestone in the company's debt resolution process and provides a clear pathway for financial recovery, with strong recovery indicators emerging in stressed assets.

OTS Extension Details

The lender consortium has approved the extension of the OTS timeline till September 2026, providing the company with additional time to complete its debt settlement obligations. This extension represents a structured approach to debt resolution with defined milestones and achievable targets.

Financial Progress and Recovery Indicators

The company has demonstrated strong execution credibility by already depositing ₹21.50 crore, representing 50% of the final settlement amount. With cumulative payments of ₹77.00 crores till date, Himalaya Food International has shown consistent commitment to honoring its obligations despite facing operational challenges. The company's stressed assets are showing strong recovery signs, indicating improved operational performance.

The company encountered significant setbacks including non-return of critical machinery by a joint venture partner despite a binding international arbitration award in March 2020, and force majeure impact from a fire at its Gujarat facility. Despite these challenges, the company continued servicing its obligations.

Management Perspective

Chairman & CEO Man Mohan Malik stated that this approval represents a defining moment for the company. He emphasized that the company has already demonstrated its intent and capability by paying ₹77.00 crores, including ₹21.50 crores under the revised OTS. With the extension now in place, he noted that the path to full closure is clear and fully achievable.

Strategic Implications

The OTS extension approval provides several strategic benefits for the company:

• Balance Sheet De-risking: Legacy liabilities now have a defined and executable closure path
• Banking System Endorsement: Strong reaffirmation of confidence by lenders led by State Bank of India
• Value Unlock Potential: Clears pathway for asset monetization, capital infusion, and expansion of export-driven verticals
• Asset Recovery: Strong recovery seen in stressed assets indicates improved operational efficiency

Growth Prospects

With financial clarity emerging and strong recovery indicators in stressed assets, the company is positioned to scale operations through export expansion to UK, Australia, and EU markets. The focus on high-margin value-added products is expected to improve operational leverage and margins significantly. The company remains confident of completing the balance ₹21.50 crores within the sanctioned timeline, which would result in a clean balance sheet and accelerated value creation.