New Delhi, Jan 25: The cabinet committee on disinvestment has approved thebid of Hindustan Lever Ltd (HLL) for buying out 74 per cent government stakein Modern Foods Industries Ltd (MFIL). The committee approved on Tuesday thetechnical and financial bid of the FMCG major. The approval will yield Rs105.45 crore to the government and inject a fresh equity of Rs 20 crore intoMFIL, making HLL's shareholding to 74 per cent. The Financial Express wasthe first to report on January 10 that HLL was all set to takeover MFIL.A wholly-owned government PSU under the department of food processingindustries, MFIL's authorised capital is Rs 15 crore and paid-up capital isRs 13.01 crore. After registering profit before tax of Rs 16.45 crore in1996-97 and Rs 7.65 crore in 1997-98, MFIL incurred losses of Rs 6.87 crorein 1998-99.
Production and marketing of bread is the major activity of the company,accounting for about 57 per cent of the turnover. The rest comes fromnon-bakery activities like supplementary nutritional foods under severalstate governments. Out of seven directors, two will be from the governmentincluding the chairman. HLL has been restricted to lay off employees tillthe completion of one year of the shareholders' agreement without beinggiven benefits equal to or better than under the prevalent scheme of thegovernment, or as applicable by law.
Nod for IA divestment
The Government on Tuesday approved a proposal to sell 51 per cent stake inIndian Airlines to a strategic partner, employees, the public, and financialinstitutions (FIs). "The cabinet committee (on disinvestment) has approveddisinvestment of 51 per cent Government equity in Indian Airlines. Of the 51per cent to be disinvested, 26 per cent will be to a joint venture strategicpartner, 25 per cent to employees, FIs and (the) public," a Governmentspokeswoman said.
(Reuters)
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