Coca-Cola divests 49% stake in Indian subsidiary
NEW DELHI: The government had asked Hindustan Coca-Cola Beverages Private Ltd. to divest up to 49 percent by Friday.
As per the government approval granted to Coca-Cola in 1997, Hindustan Coca-Cola was required to fulfil the mandatory divestment conditions by way of Indian participation of up to 49 percent in five years.
"We are delighted to bring in significant Indian ownership in our beverage business," said Sanjiv Gupta, deputy president of Coca-Cola Company's India division.
"This placement will enable Indian shareholders to share in the prosperity of our downstream beverage subsidiary," he added.
The company said out of the 49 percent stake 10 percent has been transferred to two Hindustan Coca-Cola Beverages Employee Welfare Trusts.
Of the remaining 39 percent, a little over six percent was placed with former and current bottlers and suppliers and the rest was placed with financial, private and high net worth investors, it said.
"I find it very gratifying to note a number of our former bottlers have chosen to be part of this extended Coca-Cola family," said Gupta. "We continue to see a bright future for our beverage business in India."
ICICI Securities and ABN Amro Corporate Finance have been advising Coca-Cola on the divestment of stake and in identifying potential investors.
Hindustan Coca-Cola owns and operates 26 plants and 60 distribution centres in different parts of the country. In addition, it has 20 contract packers to augment its production capacity.
Coca-Cola had earlier made representations to the government for deletion of the divestment condition. The government considered the request twice in 1997 and rejected it.
The soft drink major submitted yet another representation on June 12, 2002, for "reconsideration of prayer for waiver for divestment condition." It, however, later decided to comply with the condition by February 28, 2003.
Coca-Cola made operating profits for the first time in its eight-year stint in India in 2001.
It operates a diversified beverage business from carbonated soft drinks and packaged drinking water to powered drink mix, energy drinks, juice-based drinks, hot coffee and tea.
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