Dabur Set To Exit From Excelcia

Dabur India is likely to sell its 40 per cent stake in Excelcia Foods to Swiss foods major Nestle SA, which holds 60 per cent in the biscuits joint venture.

The dispute has been before the Company Law Board since late March. However, both companies have been asking for adjournments of the hearing in order to reach a settlement, as desired by the court.

Industry sources said both Dabur and Nestle were likely to inform the CLB of their intentions at the next hearing, slated for later this month. However, the final sale of shareholding may take over a month, added the sources.

 

Nestle officials were unavailable for comment and Dabur officials refused to comment on the issue as it was sub-judice.

Dabur had moved the CLB against Nestle on March 27, alleging mismanagement and oppression of the minority shareholder in the joint venture.A day later, it moved Foreign Investment Promotion Board.

The offices of Excelcia Foods, located on the outskirts of Delhi, have reportedly not been functioning since March 27.

Dabur and Nestle were feuding over the pricing of Dabur's shares in Excelcia, which Dabur wanted to dispose of. At one time, Dabur demanded that it should be paid more per share for its present holding than it had received while divesting 20 per cent in favour of Nestle SA earlier. That deal gave the Swiss company a majority holding in the joint venture. Dabur India had received about $ 2.5 million for selling 20 per cent in Excelcia.

Nestle SA had also made a counter offer to sell off its 60 per cent shareholding to Dabur at a token of Rs 10.

Sources said, Dabur had been resisting this offer as it did not want to be left with liabilities of the joint venture if Nestle walked out and set up its own biscuit operations through its Indian subsidiary.