Procter & Gamble will pay an undisclosed severance compensation to the Poddar group to reduce its holding in Gillette India to less than five per cent and exit as co-promoter of the shaving products company.
P&G, which holds 75.90 per cent in Gillette India, will also sell a marginal stake to prune its holding to 75 per cent to comply with the minimum public shareholding norm. The Poddar group now owns 12.86 per cent in Gillette India.
On Thursday, market regulator SEBI approved the Poddar group’s revised proposal for turning a non-promoter investor in GIL.
Post the arrangement, P&G, headquartered in Cincinnati, US, becomes the sole owner of Gillette India. S. K. Poddar will step down as Chairman of Gillette India and also give up his board position. His son Akshay Poddar too will relinquish board membership.
Last month, S. K. Poddar submitted to SEBI a revised proposal after the Securities Appellate Tribunal rejected his appeal against the market regulator denying to change his status as a co-promoter. The exercise was to meet the minimum public holding norm in GIL.
Poddar told Business Line the severance compensation was being finalised through negotiations with P&G. “However, the Offer For Sale will be the first step from GIL’s two current promoter groups. Then the termination of the shareholder agreement and compensation payment would happen. The modalities, such as EGM or postal ballot for getting shareholders’ nod, are being worked,” he said.
GIL’s shares shot up 9.38 per cent and closed at Rs 2,230 on BSE.