MUMBAI, July 23: The Unilever group has hiked its stake in Pond's India to 51 per cent from 47.7 per cent at a cost of Rs 57.72 crore. The move paves the way for the eventual merger of Pond's with Hindustan Lever.

Earlier this week, Pond's completed the allotment of 9.31 lakh equity shares of Rs 10 each on a preferential basis to Unilever. The shares were issued at a premium of Rs 610 a share to Unilever Overseas Holding BV of Holland (formerly known as Unichema Holland BV). Chairman Keki Dadiseth had hinted at a possible merger of Pond's and HLL at the recent annual general meetings of the two companies, saying that the two companies already have synergies in product lines and marketing activities.

Pond's has said that it has secured Reserve Bank of India approval for the above issue. Pursuant to the consent terms filed with the Mumbai High Court, which were taken on record by a division bench on June 16, Pond's had made a fresh application to the RBI regarding the preferential allotment of the shares to Unilever. The board of Pond's India met separately to consider a fresh application.

Pond's India and sister concern HLL had worked out a compromise deal with RBI on the pricing of their 1993 preferential issues. Under the deal, both HLL and Pond's agreed to RBI's pricing guidelines. As per the compromise, Pond's agreed to a price of Rs 620 per share for its preferential allotment to Unilever, as against Rs 180 per share, earlier cleared by the company's shareholders. This would mean an additional investment on the part of Unilever to the extent of Rs 40.04 crore.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.