MUMBAI, Aug 13: Godrej Soaps is planning to increase its holding in associate company Godrej Foods to over 50 per cent from the existing 41 per cent. The move is aimed at maximising the benefit of yields on the investments to Godrej Soaps and its shareholders.

Godrej Soaps directly holds 13.13 per cent in Godrej Foods. It holds the balance of the 41 per cent through its subsidiary companies, Godrej Capital (18.87 per cent) and Ensemble Holdings & Finance Ltd (9.16 per cent).

Godrej Soaps is seeking shareholders' approval to invest upto Rs 22 crore in upping its stake in Godrej Foods. Besides Godrej Soaps, the Godrej family has a holding of around 22 per cent in Godrej Foods' equity capital of Rs 16.21 crore. The Great Eastern Shipping Company has a 6 per cent stake while the balance 30 per cent is with the public.

Based on the current price of around Rs 27 a share on the Bombay Stock Exchange, Godrej Soaps will have to pay around Rs 4 crore to buy a 9 per cent stake in the company.

According to company sources, the additional shares will be acquired at an appropriate time. The company feels that the shareholding could be increased by acquiring shares of any other shareholder subject to compliance with various laws and regulations.

Sources said the holdings of the two subsidiaries in Godrej Foods may be taken over by Godrej Soaps, following their possible liquidation. During the year, Ensemble Holdings & Finance made a rights issue of 10.50 lakh equity shares of Rs 10 each which was subscribed only to the extent of 10,000 shares by Godrej Soaps.

Godrej Foods was promoted jointly by Godrej Soaps and Great Eastern Shipping in 1984. The company manufactures Jumpin' tetrapak fruit drinks which has gained a substantial market share in the industry. Godrej Foods is also involved in the manufacture of vegetable oils.

Godrej Soaps, in its notice to shareholders for the annual general meeting, has also stated with regards to its investment in Godrej HIcare (49:51 joint venture with Sara Lee) that it would like to avail of any opportunity of acquiring shares from other shareholders.

Godrej HIcare, a leader in the household insecticides market, ceased to be a subsidiary of Godrej Soaps with effect from July 7 this year after the sale of 11 per cent share capital in Godrej HIcare to Sara Lee. Godrej HIcare increased its net profit by 61 per cent during the year.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.