Mumbai, Sept. 21 :     Godrej Foods will sell its 29 per cent stake in Godrej Pillsbury to group holding company Godrej & Boyce for Rs 31.13 crore and raise Rs 18 crore through a rights issue as part of a financial restructuring exercise under way within the Adi B Godrej group. Godrej Foods will use the money to retire high-cost debt and reduce its interest burden which stood at Rs 19.37 crore in 1998-99. Following the divestment, Pillsbury will hold 51 per cent while Godrej & Boyce will control 29 per cent in the venture. The rest will be shared between Godrej Soaps and the public. The rights issue, to be made in the ratio of 3:4 at a premium of Rs 5-8 per share, is expected to increase the company?s equity base and reduce the proportion of debt further. ?With the financial restructuring, we can improve the company?s performance and maximise returns to shareholders,? Godrej Foods managing director Sudhir Awasthi said. The move comes at a time when Godrej Foods has been passing through a lean phase since the last two years. Though turnover surged 55 per cent to Rs 460 crore in 1998-99, margins have shrunk. This has largely been attributed to the continued downtrend in edible oils, a business which accounts for the bulk of the company?s turnover. Andersen Consulting has advised Godrej Foods to enhance operational efficiencies in its vegetable oils and processed foods divisions if it wants to achieve the objective of cutting costs across the board, sources from the group said. Interestingly, Andersen is also exploring recast options for Godrej Soaps, the FMCG major in the Adi Godrej stable. A Godrej Foods release said the divestment would not affect the distribution agreement between Godrej Foods and Godrej Pillsbury. At present, sales and distribution of Godrej Foods is under the charge of Godrej Pillsbury. Godrej Pillsbury makes cake mixes and green giant corn. However, the bulk the Rs 22-crore company?s turnover is contributed by Pillsbury Atta. Sources said the primary objective of forming the joint venture was to introduce in India products made by Pillsbury, part of the UK-based Grand Met group. The food major also sells frozen food, such as the Haagen Daz range of ice-creams. Godrej Foods recently introduced Xs and Refresh, two brands of fruit beverages. While Xs is a nectar-based fruit beverage, Refresh is a low-priced beverage aimed at the mass market. The company has been promoting its Cooklite brand of sunflower oil, apart from other products which include Jumpin, Godrej Tomato Puree, mineral water and Blue Diamond range of flavoured nuts.