Gillette To Hike Ispl Stake To 72%

US-based Gillette Corporation expects to increase its stake in its subsidiary, Indian Shaving Products Ltd (ISPL), from the present 52 per cent to 72 per cent, after the completion of restructuring of ISPL by September this year.

ISPL has already obtained shareholder approval for merging two other Gillette group companies _ Duracell India and Wilkinson Swords _ with itself and the proposal is pending approval from the court. Gillette Corporation also plans to bring in an investment of at least $10 million into its subsidiary, Duracell India, over the next one year to upgrade manufacturing facility at Manesar.

"We have already obtained shareholder approval for the merger of Duracell India and Wilkinson Swords with ISPL and the process should be over by September this year. By then we expect to get the permission granted by the court," ISPL legal and corporate affairs director Vijai Mathur told reporters here yesterday.

The proposed $10 million investment in Duracell India would be in addition to the Rs 100 crore already pumped in, Gillette Corporation regional manager Gunnar Doevle said.

"We hope that all the necessary clearances would be in place by September this year," he said. Under the plan, after the merger of the two companies into ISPL, ISPL's equity will go up from 12 million shares to 32 million shares.

Gillette Corporation holds 85 per cent and 100 per cent equity stake respectively in Duracell India and Wilkinson Swords. The parent company's effective holding in Indian operations would become 72 per cent after the restructuring gets over.

Explaining the reasons for undertaking this massive consolidation drive, Mathur said this would put an end to the multitude of legal entities Gillette's Indian operations was saddled with.

"We were operating with an amazing 20 legal entities, making the functions complicated and raising costs," he said.

The proposed restructuring would bring about sales force rationalisation. The company would now employ common sales force for selling both shaving products and batteries, Mathur said.

Meanwhile, Duracell India yesterday announced the launch of another alkaline battery _ Duracell Ultra.

The company claims that it has grabbed a market share of 47 per cent in the alkaline battery segment in India, followed by Energiser (28 per cent) and BPL (25 per cent).

Duracell has been growing at the rate of 33 per cent for the last three years, Duracell India regional business director Ranu Kawatra said here yesterday.