London, May 30 (PTI): The UK-based Molson Coors, one of top brewers in the world by volume, has bought Cobra Beer, which has been facing mounting losses.

The buyout has been done through a joint venture deal between Molson Coors and Cobra’s NRI-founder Karan Bilimoria.

Revealing the “pre-pack” deal with Molson Coors, Bilimoria said Cobra Beer’s Indian business would be an independent company, which would be wholly owned and financed by its shareholders.

Under the deal, Molson Coors will own 50.1 per cent of the joint venture, while a new company controlled by Bilimoria will have 49.9 per cent.

“I am happy about the joint venture as it would have enormous global growth potential. It is a long-term proposition and instantly the company can double its profit,” Bilimoria said.

Molson has put in £14 million to pay off Cobra’s secured creditors and will now win control of a debt-free business that Lord Bilimoria tried to sell last year for as much as £200 million. According to reports, Cobra Beer had posted a loss of £16 million last year.

Cobra Beer, outside India, would now be jointly run by Molson Coors and a new company — Cobra Beer Partnership Ltd — controlled by Lord Bilimoria.

Cobra has won a significant name since the NRI-billionaire established the brand in 1989 but the entrepreneur's decision to finance its growth by rolling over debts at increasingly high interest levels appears to have led to the company going into administration.

Bilimoria said under the “pre-pack administration deal, all secured creditors would be fully paid while unsecured creditors would not get anything.”

A pre-pack is when a sale is agreed before the administrator is appointed and is carried out without the business being offered on the open market.

The joint venture acquired the brand and certain assets of the Cobra business from PwC, Cobra's administrators.

Bilimoria said: “As a result of our joint venture with Molson Coors our Indian operations will now be wholly independent. We have a highly capable management team in place that will be able to expand Cobra's iconic brand in this exciting and growing market.”