Modern Dairies to sell 4.65 million shares to IFC for Rs28 crore

Mumbai: Modern Dairies will sell 4.65 million shares to World Bank's private lending arm International Finance Corporation (IFC) at Rs60 a share, for a total of Rs27.90 crore.

The company had obtained approval of shareholders at its extraordinary general meeting on 23 June and with the IFC board approving the acquisition, Modern Dairies has now entered into a `subscription agreement' and 'shareholder agreement' with IFC, Modern Dairies said in a filing with the Bombay Stock Exchange.

The Haryana-based company said the allotment committee of directors will meet on 8 July to allot 46,50,000 equity shares to IFC at Rs60 per share, subject to the receipt of the subscription amount from IFC.

Ernst & Young acted as Financial Advisor to Modern Dairies Ltd on the transaction.

IFC had earlier offered to provide a loan of up to $8.5 million and subscribe to 46.50 lakh shares of Modern Dairies on a preferential basis for the expansion of the milk processing capacity of the company.

Set up in 1973, Modern Dairies, a part of the Chandigarh-based Modern Business Group, manufactures a wide range of milk and milk products. The company has ISO:9001-2000, HACCP (Food Safety), and ISO:14001- 2004, (Environment Management) certification to its credit.  

Located at the centre of milk-rich area of Karnal, 136 km from Delhi, the dairy gets abundant milk supply, ensuring a healthy regular growth.