Coca-Colas Indian arm has decided to divest 49-per cent
equity in its downstream beverage company Hindustan Coca-Cola
Beverages Pvt Ltd (HCCB). The divestment will be made
on a private placement business with shares being offered
to employee trusts, present and former Coca-Cola bottlers,
suppliers, business associates and private investors.
With this decision,
Coca-Cola has complied with the 17 August 2002 deadline
fixed by the government to announce plans for diluting
equity stakes in its bottling subsidiary.
spokesman Joel Peres says the divestment condition had
been laid down in the original approval given to the company
in 1996. He clarifies that Coca-Cola had no intention
of retaining 100-per cent stake in the bottling subsidiary.
It was only a question of time before Coca-Cola divested
its stake in the company. It is not the policy of Coca-Cola
to retain a 100-per cent stake in its bottlers anywhere
in the world.
insists that the company had been seeking a waiver only
to divest at a more opportune time to enable the shareholders
to get market competitive returns. Regarding the companys
decision to opt for private placement, he says this was
the advice given by the companys merchant bankers, ICICI
Securities and ABN AMRO Corporate Finance.
Under the plan
now finalised, the wholly-owned subsidiary of the US-based
Coca-Cola Corporation, Hindustan Coca-Cola Holdings Pvt
Ltd, will sell 39-per cent equity to private investors
and business partners. These business partners will include
licensed bottlers of the Coca-Cola company suppliers as
well as former bottlers. The balance 10 per cent will
be divested in favour of local resident Indian employees
welfare and stock option trusts.
This will leave
the parent company with a 51-per cent equity stake.
The company expects to complete the divestment process
as soon as possible, says Peres.