Injunction On Bank Guarantee Upheld
Injunction On Bank Guarantee Upheld
Coca-Cola India is expected to get a clearance from the Delhi High Court some time next month to merge its four downstream bottling operations into one.
This would help it to go faster with its company-owned-bottling-operations (Cobo) scheme. The cola major has about 20-odd franchisee bottlers who it plans to acquire.
Among the big franchisees who are still left to be acquired include the Goenkas in the east, the Kandharis in Punjab and the Ladhanis in parts of Uttar Pradesh, who control about 14 bottling units of Coke.
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Sources said that Coca-Cola India proposes to complete the acquisition of assets, land and machinery of the remaining bottling-franchisees within this calendar year. It has been pointed out that the green signal from the Delhi High Court will hasten the Cobo scheme.
Coca-Cola India had started its Indian operations with 54 franchisee bottlers. Over the years, the arm of the Atlanta-based company has bought over more than 50 per cent of the bottling-franchisees.
The merger of downstream bottling units is being done to gain critical mass in operation in India, which is part of its business restructuring plan. The four bottling downstream subsidiaries of Coca-Cola are Hindustan Coca-Cola Bottling North-West Pvt Ltd, Hindustan Coca-Cola Bottling South-West Pvt Ltd, Bharat Coca-Cola Bottling North-east Pvt Ltd and Bharat Coca-Cola Bottling South-East Pvt Ltd.
The two wholly owned companies were permitted to be capitalised over a period of 10 years with foreign equity of up to $350 million each.
The approval envisaged that each of the two Indian holding companies will set up downstream ventures for bottling operations.
The approval permitted these two downstream ventures to be initially set up as 100 per cent subsidiaries with a proviso that these subsidiaries ensure Indian participation up to 49 per cent over a period of five years.
CCSAH has since incorporated two holding companies in India, Hindustan Coca-Cola Holdings Pvt. Ltd and Bharat Coca-Cola Holdings Pvt Ltd. VRS