New Delhi, Dec 08: Plagued with whopping accumulated losses of about Rs 2,086 crore and impending divestment of 49 per cent equity in Indian operations, Coca-Cola has decided to set these off by using funds already invested by its Singapore based subsidiary in the country. Till date, the US giant has invested over Rs 3,300 crore in Indian operations through the Singapore-based subsidiaries in Hindustan Coca-Cola Beverages Pvt Ltd, sources said here today. With the total issued and paid-up capital of HCCBL standing at only Rs 405 crore, about Rs 2,903 crore has been lying unused in what Coke calls the security premium account. Of this Rs 2903 crore, about Rs 2,100 crore will be used to offset the accumulated losses. Also, Coke plans to use the remaining Rs 803 crore to purchase one per cent redeemable, non-cumulative, non-participating preference shares of Rs 10 each in Hindustan Coca-Cola beverages. These preference shares would be redeemed after seven years from the date of allotment, sources added.
Coca Cola spokesperson was not immediately available for comments.
The decision to restructure the balance sheet of Indian operations comes close on the heels of HCCB being directed by the government to offload 49 per cent stake in favour of resident Indians and private investors.
For divesting equity, government has extended the earlier deadline to February 2003, sources added.
Bureau Report