Kwality Wall’s (India) Ltd on Monday said its board has approved a revised three-year intellectual property (IP) agreement with Magnum IP Holdings B.V., providing a royalty holiday until March 31, 2027, as the ice cream maker looks to stabilise operations following its demerger.
“Following the demerger of the Ice Cream business, the management undertook a comprehensive review of the existing royalty arrangement, considering evolving business dynamics, the Company’s revised strategic direction, financial position and competitive landscape,” Kwality Wall’s (India) said in an exchange filing.
Under the agreement, which runs until March 31, 2029, the royalty rate for use of licensed brands will be nil up to FY27, to support the Company’s planned investments and stabilisation efforts post-demerger, and set at 1% of turnover from licensed products in FY28 and FY29, plus applicable taxes, the company added in its stock exchange filing.
The revised structure replaces the transitional sub-licensing arrangement that had been put in place at the time of the demerger and reflects a review of the company’s strategic priorities, financial position and competitive landscape, Kwality Wall’s said.
The arrangement has been negotiated on an arm’s-length basis and approved by the audit committee and the board.
