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Journalism of Courage
MUMBAI/NEW DELHI, SEPT 28: Hindustan Lever Limited (HLL), Britannia and Nestle are in the race for the 74 per cent equity in public sector bread maker Modern Foods (MFIL). These companies are among those who have submitted their bids for the government equity along with management control.
Multinationals were eyeing Modern Foods because of its wide network of distribution and manufacturing base, sources said. It has 14 bread manufacturing units spread across the country, besides a huge distribution system. MFIL has also 22 operating franchisee units across the country. For a company like HLL which is currently not in the bread and bakery segment, the name `Modern’ will provide an easy path to establish and gain market share, they said.
HLL has already announced plans to enhance the contribution from foods to almost 50 per cent of its turnover 10 years down the line. The Rs 4000 crore Indian biscuit market is currently dominated by Parle and Britannia with the latter having a 14 per cent market share.MFIL, with an authorised share capital of Rs 15 crore and paid up capital of Rs 13.01 crore, had posted a turnover of Rs 181.5 crore during 1998-99.
Meanwhile, the government has extended the last date for bids for selling its 74 per cent equity in Modern Foods by three weeks to October 15 presumably to enable the new government to take the final decision. "The whole process of privatisation is unlikely to be completed before November, as the administrative ministry is keen to have a legitimate minister at the time of deciding the controlling partner for MFIL," top company officials said on condition of anonymity.
The government has now extended the last date for submission of bid to October 15 as against September 21 set earlier. When contacted MFIL managing director J S Srivastava told PTI the bid date was extended due to delay in preparation for privatisation process by ANZ Investment Bank, the global advisor for the sale of majority stake in the company.
