The Hindu Business Line : Jumbo set to exit India

A FEW weeks before his demise on April 6, 2002 Manu Chhabria told one of his liquor business allies in a late night meeting that he feared his businesses could go without effective management if he were to die.

The man, who was once described as a takeover tycoon and who was then negotiating an equal joint venture with SABMiller for his beer operations, thought of incorporating an automatic clause which would give his foreign partner 51 per cent equity advantage and complete management control if anything happened to him.

Manu Chhabria's premonition has started to come true three years after he succumbed to a heart surgery in Mumbai's Jaslok Hospital. The Dubai-based Jumbo group, founded by him in the early 70s, looks set to quit Indian shores.

After signing a Rs 1,300-crore deal with the UB group to offload SWC's liquor business, which is Jumbo's largest enterprise in the country, it is expected to sell the other Indian companies such as Mather & Platt, Hindustan Dorr Oliver, Falcon Tyres, Gordon Woodroffe, Narmada Gelatines, and Shaw Wallace Agrichem.

The Jumbo Group's bounty is poised to get bigger. Its beer joint venture partner SABMiller today confirmed it was in talks with the Manu Chhabria family to buy out their remaining 50 per cent stake in Shaw Wallace Breweries Ltd. "We are in negotiations with them regarding the future of the joint venture. But there is no agreement yet," Mr Nigel Fairbrass, spokesperson of SABMiller Plc, told Business Line from London.

It is learnt that Jumbo Group could rake in almost Rs 800 crore for the remaining shares even though the SABMiller officials dubbed it as speculation and offered no further comments.

On May 27, 2003, Jumbo hived off Shaw Wallace's beer operations into a 50:50 joint venture, with SABMiller paying $132.8 million for the initial stake and management control.

Jumbo's Chairperson, Ms Vidya Manohar Chhabria, wants to focus on the group's original electronics business in the Arabian Gulf, from which Manu Chhabria built an empire with zealous acquisitions back in his homeland through the 80s.

A top Jumbo group official told Business Line: "After today's deal to sell the liquor business, Jumbo will have interests in six other enterprises (listed above). These too, which are much smaller in revenues, are on the block even though the Chhabria estate is in no hurry for a desperate sale. These are specialised businesses and the exit process is bound to take some time."

Most of these existing businesses have an individual turnover less than Rs 50 crore, the official added.

Dunlop India Ltd, a non-operational asset of the Chhabria estate, is not in the sale list "as it is not likely to find any buyers as of now".

The official said that Jumbo was looking to exit from other Indian companies as well as the Chairperson wants to settle her three daughters.

In fact, soon after her father's demise, the eldest daughter had moved a Dubai court seeking a split in the family silver.

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