Duracell To Hike Unit Stake
International battery manufacturers, and one of the leaders in alkaline technology, Duracell Inc has decided to hike its equity stake in its joint venture Duracell India Pvt Ltd from 74 per cent to 93 per cent through fresh infusion of shares.
Under an agreement, the company's Indian partner, Calcutta-based industrialist Saroj Poddar, whose equity will fall from 24 per cent to a mere 7 per cent as a result of the recast, will have the option of buying out the shares from Duracell and increase its equity to 15 per cent. The deal received the nod from the Foreign Investment Promotion Board (FIPB) recently. However, the FIPB has allowed Poddar to exercise the buy-back option by 31 December 1999.
The price of the shares at the time of buy-back will be the same at which the shares are proposed to be allotted to Duracell.Under the agreement, the company will issue fresh equity of 27,408,700 shares at the value of Rs 10 per share capital to Duracell Mauritius, a subsidiary of Duracell Inc, ofUS.
Thus, Duracell, which held Rs 29.60-crore equity out of the paid up capital of Rs 40 crore, will now hold Rs 35.6 crore in the revised paid-up capital of the company. Heritage Furniture ,controlled by Saroj Poddar will have the option to increase equity in the company from 7 to 15 per cent by purchase of 29,14,000 shares with a face value of Rs 10 each from Duracell.
Duracell was given foreign collaboration approval in April 1994 with the Poddars to manufacture and market Duracell alkaline batteries in the country.
Although Duracell India continues to manufacture alkaline batteries in the country under the Duracell brand, the brand itself has been brought within the fold of Gillette subsidiary Indian Shaving Products (ISPL) in the country. This was done subsequent to the international acquisition of Duracell by Gillette, in the wake of which the marketing operations of Duracell India was merged into ISPL.
Apart from its collaboration with Saroj Poddar in Duracell India, Gillette partners Poddar in ISPL as well. Poddar currently holds about 20 per cent in ISPL, in which Gillette has a 51 per cent controlling stake.