ICI may pick up HLL's stake in Quest

ICI India is likely to pick up Hindustan Lever Limited's (HLL) stake in Quest International India in March 2006.

Sources close to ICI India informed that the discussion with HLL is at a final stage to buy over its stake.

ICI India is likely to pay close to Rs 70 crore for HLL's stake in Quest. ICI now holds a 51 per cent stake and management control in Quest, while the remaining 49 per cent is with HLL.

Unilever, the parent company of HLL, divested its stake globally in Quest to ICI 3-4 years back.

ICI India showed interest to buy HLL's stake in the outfit. Quest currently has a paid-up equity of Rs 28.8 crore.

ICI had invested around Rs 152 crore in the company for a 51 per cent stake.

When contacted, the spokesperson for ICI confirmed the development.

"The matter will be settled in another two months time," he said.

However, the spokesperson refused to comment on the pricing of the deal by saying that the discussion is still on over the valuation.

The spokesperson made it clear that the payout to HLL would be proportionately much lower than what ICI paid for the 51 per cent stake.

"Our investment for the 51 per cent stake is around Rs 152 crore, but for HLL's 49 per cent stake, the payout will be much lower. The reason is simple. ICI had to pay a premium for the management control of Quest, which will not be there in case of a 49 per cent stake of HLL," sources added.

Quest produces specialty chemicals related to primary food flavours, and fragrances related to personal care products.

The company posted a net profit of Rs 12.83 crore over a turnover of Rs 107.86 crore in the financial year ended March 31, 2005.