Putting an end to a regulatory dispute, FMCG major Gillette India Ltd (GIL), on Thursday, announced a fresh plan to meet the Securities and Exchange Board of India’s minimum public holding norms under which its U.S.-based promoter P&G and the Poddar group would sell part of their respective holdings.
While P&G would sell 0.9 per cent stake, worth about Rs.66 crore at the current market value, the Poddar group would also bring down their holding to below 5 per cent through part sale of equity, the company said in a statement.
'Subsequently, the process for termination of the shareholders agreement between the Poddar group and the P&G group shall be initiated, pursuant to which the Poddar group will have no special rights in GIL other than that of a normal public shareholder,' it added.
Further, S. K. Poddar and A. Poddar will step down from the GIL board, and on approval of the resolution passed by GIL shareholders in a general meeting or a postal ballot. The remaining shareholding of the Poddar group shall be considered as public shareholding, the company said. 'SEBI has mentioned that they will not insist on P&G making an open offer as a result of the above mentioned events, in view of the intent behind the transaction, which is to comply with the minimum public shareholding requirements,' it added. SEBI has also imposed several restrictions, and provided guidelines to the company to adhere to achieve the minimum public shareholding requirements.
'There shall be no acquisition of shares of GIL by the Poddar group for a period of one year from the date of declassification of the Poddar group as public shareholder,' SEBI said.
Commenting on the development, S. K. Poddar told reporters on the sidelines a press conference: 'Once we complete the process, I will be declassified as promoter and left with little less than 5 per cent or 4.99 per cent in Gillette. I have done it in the interest of the company.'
He added that the latest SEBI decision came after several rounds of discussion.
'We will call for an annual general meeting to inform the shareholders about the changes and all formalities should be over in two to two-and-half months time, that is, by September or October. There is discussion between me and P&G on a severance package,' Mr. Poddar said.