The Hindu Business Line : Hindustan Lever to consider merger of Modern Foods

Proposals
MFIL shares are proposed to get cancelled subject to approval by shareholders and the high courts at Delhi and Mumbai.
Also upon the scheme of amalgamation being sanctioned and put into effect.
The Board will also consider demerging its plantation assets.

Mumbai , Sept. 4

Hindustan Lever Ltd will consider the amalgamation of Modern Foods Ltd (MFIL) with itself. The company's board of directors will meet on September 8, to consider a proposal for the same, it said, in a statement to the stock exchanges on Monday.

Since MFIL is a wholly-owned subsidiary of the company, no share exchange ratio is envisaged nor has there been a need for carrying out a valuation exercise, said the company, in the statement. MFIL shares held by the company are proposed to get cancelled subject to approval by shareholders and the High Courts in Delhi and Mumbai, upon the scheme of amalgamation being sanctioned and put into effect.

HLL had acquired 74 per cent equity stake in MFIL from the Union Government in January 2000, for over Rs 125 crore. The remaining stake was acquired two years later for Rs 44 crore. In the recent past, there has been speculation that MFIL might be put up for sale.

The board of HLL will also consider demerging its plantation assets in Tamil Nadu into separate subsidiaries, said the company's statement.

The assets chiefly consist of land and buildings at the erstwhile plantation units of Jamnagar, Shamnagar and Devarshola in Tamil Nadu. They are proposed to be demerged into one or more subsidiaries; the board will also settle a scheme of arrangement for the said purpose.

The board of MFIL will also independently meet the same day, subsequent to the company's meeting, to consider the aforesaid proposal for amalgamating with the company.

On Monday, the HLL scrip closed at Rs 243.30, up by 1.88 per cent from the previous close of Rs 238.80.

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