Speaking at the extraordinary general meeting held here today, HLL chairman KB Dadiseth said the animal feeds business would be transferred to one of the ``many existing valid wholly-owned dormant subsidiary companies.'' The transfer at a price of approximately Rs 16 crore would allow the animal feeds business to have a separate identity and increased operational flexibility, he said.

According to a memorandum of understanding entered into with the Indian subsidiary of Nutricia International BV of Netherlands, HLL would transfer its dairy manufacturing facilities, its milk collection infrastructure and the `Anik' trademark to Nutricia (India) Pvt Ltd. The transfer is expected to take place at a price of Rs 19.5 crore plusworking capital valued at around Rs seven crore.

HLL's global brand `Milkana', which continues to be used by parent company Unilever, would be leased to Nutricia India for a five period after which it would revert back to HLL.

The resolution concerning the merger of Industrial Perfumes with HLL went to poll at Monday's court-convened EGM, and shareholders cast their votes to approve the merger of Industrial Perfumes with HLL. The results of the poll will be available by Tuesday.

The HLL board, in its meeting on May 3, had proposed the merger ratio of two shares of HLL for every five shares of Industrial Perfumes. The merger is with retrospective effect from January 1, 1999. With the merger, HLL's equity base will marginally rise to Rs 220.06 crore, from Rs 219.57 crore. Industrial Perfumes, which was incorporated in May 1997, came into Lever's fold after the merger of Tomco with HLL.

The merger is significant to the extent that it will pave the way for the multinational to form joint ventures inspeciality chemicals, as after the merger, all speciality chemicals operations in India will come under one entity. Industrial Perfumes is involved in the manufacture of speciality chemicals like aroma chemicals, fragrances, natural essential oils, gums, resinoids, spice oils, and oleoresins.

The business growth in speciality chemicals for HLL is supported by three new factories -- for aroma chemicals at Chiplun in Maharashtra, for flavours at Daman, and a multi-product line at Daman.

The Rs 278-crore animal feeds business was put on the block. However, as no bid received by the company matched the expected price level for the business, the firm has decided to transfer the business to an operational subsidiary. ``The other reason in doing so is to give greater focus to a small business (as compared to a corporate giant like HLL) like animal feeds. This would also help in increasing the operational flexibility of the business to structure a transaction which will benefit shareholders,'' Dadisethsaid.