Coca-Cola Gets Time To Divest Equity After US Nudge

New Delhi, December 22: | Updated: Dec 23 2002, 05:30am hrs
The government has allowed extension of time to Coke for meeting its disinvestment obligation up to February 28. The decision comes after the United States government approached New Delhi for giving a relaxation to the Atlanta-based soft drink multinational firm from divesting equity in its local subsidiary to Indian partners or public.

Coke firm Hindustan Coca-Cola Holdings Pvt Ltd was required to divest up to 49 per cent equity in Hindustan Coca-Cola Beverages Pvt Ltd by July 16 this year as per the original obligation when the company entered the country.

A few other foreign enterprises had approached the foreign investment promotion board (FIPB) for relaxation of the disinvestment condition which had not been agreed to. However, an exception was made in this case, sources told UNI.

Certain references have been received from the United States authorities regarding the divestment condition in respect of Hindustan Coca-Cola Holdings Pvt Ltd, sources said.

The soft drink giant has expressed various difficulties to the government and sought a waiver from its divestment obligation. However, the department of industrial policy and promotion had remained steadfast in rejecting its plea till now.