Marico to demerge its Kaya skin care business

Consumer goods company Marico is planning to demerge its Kaya Skin Care Solutions business and list it separately as Marico Kaya Enterprises (MaKE).

As part of the demerger, MaKE will also be listed on the Indian stock exchanges of BSE and the NSE.

Marico’s current chairman and managing director Harsh Mariwala will continue in his position in both the entities, which will have a separate board.

The firm said the shareholders of Marico will be issued 1 share of MaKE with a face value of Rs 10 each to be issued at a premium of Rs 200 ($3.62) per share, for every 50 shares of Marico with a face value of Rs1 each.

The Indian FMCG company said it has also planned to unify its Marico’s Consumer Products Business (CPB) and International Business Group (IBG) into single entity.

Marico’s CFO Milind Sarwate told dnaindia.com that for the firm to handle the two businesses, it requires different approaches, and therefore segregating them will help in delivering better value for both entities.

The Kaya Skin Care business, with a turnover of around Rs2.8bn ($50.77m) in 2012, comprises over 100 clinics and contributed about 7% to Marico’s revenue.

The firm had posted a loss of Rs48m ($0.87m) in the July-September quarter, affecting Marico’s bottomline.

According to the firm, under the restructuring strategy CPB head Saugata Gupta will lead the overall FMCG business as CEO-Marico with effective from 1 April 2013.

The firm said under the strategy IBG head Vijay Subramaniam will take over as CEO-Kaya, effective from 1 April 2013, and he will be in charge of the Kaya business in India and overseas.