Marico to separate Kaya biz, list it on bourses
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The company's board, at its meeting held today, approved restructuring of Marico's businesses, corporate entities and organisation, effective April 1, 2013.
As part of the restructuring process, the company's Consumer Product Business (CPB) and International Business Group (IBG) will now form a unified FMCG business while Kaya will be re-defined as a separate business, Marico said in a statement.
"The company also strongly believes that for the next phase of its value creation journey, the Kaya business should be run in an entrepreneurial manner independently from the FMCG business of Marico," it added.
The restructuring will bring sharper focus across both the consumer goods and cosmetic services businesses of the company, it said.
The company's board has proposed to create two separate companies through partitioning of the current Marico Ltd, into an FMCG business company which is Marico Ltd (already in existence) and a Kaya business company which will be Marico Kaya Enterprises Ltd (MaKE, to be formed), it said.
As a consideration, the shareholders of Marico Ltd as on the record date shall be issued one share of MaKE with a face value of Rs 10 each to be issued at a premium of Rs 200 per share for every 50 shares of Marico with a face value of Re 1 each, it added.
"MaKE will also be listed on the BSE and the NSE, just like Marico Ltd...Listing may take about 60-75 days from the date of receipt of approval of the Scheme of Arrangement from the Court," it added.
MaKE will have its own separate board of directors, distinct from Marico's board, the company said.
"Harsh Mariwala will continue to be the Chairman and Managing Director of both Marico Ltd and Marico Kaya Enterprises Ltd," it added.
The company said there is unlikely to be any adverse impact on the income statement of Marico or MaKE pursuant to the Scheme of Arrangement except for the costs of executing the proposed Scheme.
The company said Saugata Gupta, who currently heads Consumer Products Business will lead the overall FMCG Business, as Chief Executive Officer- Marico and will continue to report to Harsh Mariwala.
"Vijay Subramaniam, who currently heads the International FMCG business, will take over as Chief Executive Officer- Kaya, effective April 1, 2013," it added.
The company said Kaya Chief Executive Officer Ajay Pahwa has decided to leave the organisation, to pursue an entrepreneurial venture backed by private equity investment.
Scrip of Marico today closed at Rs 227.45 on the BSE, up 1.36 per cent from its previous close.
The Kaya skin care business, which was launched in 2002, has 82 clinics in 26 cities across India, 19 clinics in the Middle East and 2 clinics in Bangladesh. Its product range has over 40 products for skin, hair & body for both women and men.
In 2010, Kaya also acquired the aesthetics business of Singapore-based Derma Rx Asia Pacific Pte Ltd. There are 3 centres across Singapore and Malaysia. Marico, which is present in more than 25 countries across Asia and the African continent, had reported turnover of Rs 4,000 crore in 2011-12.
The company's portfolio includes brands like Parachute Advansed, Saffola, Hair & Care, Nihar and Mediker. It recently acquired the personal care business of Reckitt Benckiser.