Reliance to acquire majority stake in Lotus Chocolate

New Delhi: Reliance Consumer Products Ltd, the fast-moving consumer goods arm of Reliance Industries Ltd, will acquire a controlling stake in Lotus Chocolate.

Reliance Consumer Products Ltd (RCPL) has entered into an agreement with the promoters of Lotus Chocolate, which manufactures chocolates, cocoa products and cocoa derivatives.

As part of the share purchase agreement, RCPL proposes to acquire 77 per cent of the paid-up share capital of Lotus Chocolate through a "secondary purchase" from promoters Prakash Peraje Pai and Ananth Peraje Pai, followed by an open offer.

"RCPL will acquire 65.48 lakh equity shares of LOTUS representing 51 per cent of the paid-up equity share capital of LOTUS from the current promoter and promoter group... at a price per share of Rs 113.00 aggregating to Rs 74 crore," said a joint statement.

It added, "RCPL and certain promoter group entities of LOTUS to subscribe to 5.07 crore non-cumulative redeemable preference shares of face value of Rs. 10 each."

RCPL would make an open offer for an additional 26 per cent stake, it further said.

RRVL Executive Director Isha Ambani said, "The investment in LOTUS underlines our commitment to further boost indigenously developed daily use high quality products, to serve a broad customer spectrum at affordable prices. We look forward to working with the highly experienced management team of LOTUS as we further expand the business and drive its next growth phase."

Founder-Promoter of Lotus Chocolate Abhijit Pai said, "Our strategic partnership with Reliance, through this investment, will further enable this vision and accelerate Lotus' transformation."

Earlier in a regulatory filing, Lotus Chocolate said a shareholders agreement (SHA) has been executed between RCPL and members of the promoter and promoter group, namely Prakash Peraje Pai, Ananth Peraje Pai, Poornima Pai, Nivedita Pai, Ashwini Pai, Abhijeet Pai, Aman Paiand and Aditya Pai.

Lotus Chocolate said its board approved the execution of SHA which would come into effect from the closing date as mentioned in the share purchase agreement (SPA) entered between RCPL and the promoters, namely Prakash Peraje Pai and Ananth Peraje Pai.

As per the SPA, Prakash Peraje Pai and Ananth Peraje Pai proposed to sell equity shares of the company to RCPL. Both jointly own 57 per cent stake in Lotus Chocolate, as of the quarter ended September 2022.

"The transaction contemplated under the SPA and SHA has also triggered an obligation on RCPL to make an open offer to the public shareholders of the Company...," it said.

RCPL is the FMCG arm and subsidiary of the country's leading retailing firm Reliance Retail Ventures Ltd (RRVL).