Companies

Best food forward: Bakshi, McDonald’s end legal feud

Our Bureau New Delhi | Updated on May 09, 2019 Published on May 09, 2019

Vikram Bakshi

US burger chain buys out Indian partner in deal said to be worth ₹600 crore

American burger chain McDonald’s has ended its six-year-old legal battle with its joint-venture partner Vikram Bakshi and has taken full control of Connaught Plaza Restaurants Pvt Ltd (CPRL).

In a statement released on Thursday, McDonald’s India Pvt Ltd (MIPL) said that after the settlement with Bakshi, CPRL is now wholly owned by MIPL and its affiliate MGM (McDonald’s Global Markets LLC). It further said that MGM has completed acquisition of 50 per cent voting equity shares in CPRL, held by Bakshi and his affiliate entity.

While the company did not reveal the financial details of the out-of-the-court settlement, Bakshi is learnt to have received around ₹600 crore to exit the joint venture.

CPRL runs 160 McDonald’s-branded restaurants in the northern and eastern region of the country. With the transfer of ownership and management, Bakshi and his wife have ended their association with CPRL, the statement said.

New head for CPRL

The company added that it has appointed Robert Hunghanfoo as the head of CPRL.

McDonald’s India also said that as of Thursday, it has temporarily closed McDonald’s restaurants in North and East India to comprehensively assess operational protocols and employee training.

Barry Sum, Director, Corporate Relations, Asia, McDonald’s, told BusinessLine: “We expect to progressively open these restaurants in the next 1-2 weeks. The temporary shutdown is being done to ensure that the restaurants operate in line with our global standards. ”

The company said the current staff of the restaurants will continue to be employed and will be actively involved in re-opening.

Meanwhile, the company said it is still scouting for a new Developmental Licensee for the North and East regions.

“Till the company gets the right partner for the region, CPRL will remain owned by MIPL and its affiliate,” Sum added.

“During the transition, MIPL will be focussed on two key areas – providing employees with clarity and confidence in their future at McDonald’s and leveraging McDonald’s global expertise to fortify high operating standards for our local customers,” the company added.

Bakshi signed the JV as an equal equity partner with McDonald’s Corporation in 1995 and established the first McDonald’s restaurant in India in 1996.

 

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Published on May 09, 2019
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