INDIA: Godrej confirms Hershey JV under scrutiny
Hershey's Indian partner considering options
Indian group Godrej Industries has admitted it could sell its stake in its local venture with Hershey, a business it described as "potentially sick".
The company said on Saturday (11 August) its board had backed plans to explore what to do with its Godrej Hershey venture, which has been the subject of speculation for 12 months.
"Godrej Hershey Limited (GHL) is potentially sick and the shareholders of GHL may look at redressing the issue," the Indian firm said.
Godrej and Hershey formed the venture in 2007. The US confectioner is the majority shareholder in the business, which sells products from confectionery to soy milk and cooking oil.
This year, reports in India have claimed Hershey is looking to sell its stake in the business. A report in June said Hershey wanted to operate independently in India.
On Saturday, Godrej said its board had "granted approval to explore various possibilities" for the venture. These included, it said, selling some or all of its shares in Godrej Hershey. However, Godrej is also mulling referring the venture to India's Board for Industrial and Financial Reconstruction, which can assist in helping ailing businesses or can recommend they close.
Scripcode : 500164 Company : Godrej Industries Ltd. View All
Outcome of Board Meeting | 08/11/12 14:33
Godrej Industries Ltd has informed BSE that the Board of Directors of the Company at its meeting held on August 11, 2012, inter alia, has accorded its consent to the following:
1. Further investment u/s. 372A of the Companies Act, 1956.
It is proposed to further invest in the following companies :-
(a) Godrej Consumer Products Limited, upto a sum of Rs. 150 crore; and
(b) Godrej Properties Limited, upto a sum of Rs. 100 crore.
The aforesaid proposals are subject to the approval of the shareholders.
2. Approved exploring various possibilities of restructuring Godrej Hershey Limited.
Godrej Hershey Limited (GHL) is potentially sick and the shareholders of GHL may look at redressing the issue. The Board granted approval to explore various possibilities and / or any combination thereof for restructuring its shareholding in GHL, including but not restricted to referring GHL to BIFR and / or sale of entire / partial investment held by the Company in GHL.
Original source: Godrej Industries
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