According to sources, the Godrej group has initiated talks with the multinational on the price at which the stake will be sold. Pillsbury owns the majority stake of 51 per cent in the joint venture, which essentially manufactures and markets the Pillsbury range of atta and cake mixes in the Indian market.

A questionnaire by The Financial Express to Godrej Soaps chairman Adi Godrej, seeking comment on the issue, however, elicited no response.

The move to sell its stake in Godrej Pillsbury comes close on the heels of Godrej Foods calling off the distribution arrangement with Pillsbury with effect from October 31, 2000.

The distribution agreement was signed along with the joint venture agreement between the Godrej group and Selviac Nederland BV (Pillsbury) in 1995. The equity was pumped in together by associate company Godrej Foods and Godrej Soaps to the extent of 29 per cent and 20 per cent, respectively.

Last year, Godrej Foods sold off its stake in the joint venture toholding company Godrej & Boyce Manufacturing Company, so as to retire its high-cost debts. The stake was picked up for a consideration of Rs 31.13 crore. Godrej Soaps' stake in the joint venture at 20 per cent remained unchanged.

Pillsbury's interest in the joint venture was to gain a foothold in the Indian market with its global brands of cake mixes and other frozen food products, as and when they are launched. It also acquired the distribution network of Godrej Foods when the joint venture was formed.

Godrej Pillsbury achieved sales of around Rs 30 crore last year and is expected to achieve a break-even point in June this year.

In 1995-96, Godrej Soaps had terminated its joint venture agreement with consumer products multinational Procter & Gamble. The divestiture under question - Godrej Pillsbury - would be a second such instance for the Godrej group. The Godrej group has already announced its intention to dilute its holding in Godrej Sara Lee by offloading part of its stake to the public.