New Delhi, Oct. 16: Coca-Cola India’s move, seeking approval of the Delhi High Court to write off losses in the balance sheet of its bottling subsidiary Hindustan Coca Cola Beverages, will not affect its divestment, the company said.
Speaking to The Telegraph, a Coca Cola spokesperson said writing off of Rs 2,086 crore in the bottling plant is part of a re-structuring of the balance sheet before the company approached investors to divest the mandatory 49 per cent by the February 28 deadline. This is the second time that Coke will write-off investments in its Indian operations. In the first quarter of 2000, the Atlanta-based Coca-Cola wrote off $ 367 million worth of investments in its Indian subsidiary.
“It is a routine re-structuring of the balance sheet before a company goes in for divestment. The court approval is part of the set procedure and everything will be completed before the scheduled February-end divestment date,” the spokesperson said.
The company plans to divest 39 per cent in the bottling subsidiary to private investors and bottlers and 10 per cent to employees in India.
The spokesperson said employees will be given stock options by October 17, adding that “a substantially large number of employees will be given the stock options”. However, the company refused to say how much of the 39 per cent it plans to offer to the bottlers and private investors. “We are right now talking to various business partners and bottlers and the details are being decided,” the spokesperson said.
The government had earlier set a deadline of August 17 this year, for the cola major to complete its divestment procedure. On September 19, the government had announced a further extension of six months to Coke, to complete is divestment procedure.
Earlier, the government had said the extension followed a representation outlining Coke’s commitment to comply with its divestment condition by not later than February 28 next year.