Key promoter entities put Godfrey Phillips on the block

PALAK SHAH Mumbai | Updated on January 27, 2020

KK Modi Family Trust-led entities in touch with global investment bankers for sale

Godfrey Phillips India (GPI), which sells the Marlboro brand of cigarettes and is among the country’s largest tobacco product manufacturers, has been put on the block by its key promoter entities, led by the KK Modi Family Trust.

The trust is led by the KK Modi group, which is among the oldest family businesses in India.

According to documents seen by BusinessLine, the trustees have approached global investment bankers, including Goldman Sachs, Morgan Stanley, JP Morgan and Credit Suisse, for the mandate to sell their stake.

A spokesperson for the KK Modi group and Godfrey India did not respond to phone calls and messages.

Titus Advisors, a Delhi-based legal firm that sent letters to investment banks on behalf of the KK Modi Family Trust, also did not respond to an email query.

One of the legal heirs of the KK Modi Family Trust is the controversial former IPL Commissioner Lalit Modi, who is currently ensconced in London due to his involvement in financial cases in India.

Lalit Modi confirmed the BusinessLine story on Twitter. He said, “Just to set the record straight. Yes all assets of the #kkmodi group are going on sale. I mean all. The other 3 trustees wanted to continue running the business. But I felt post my father passing away - the value will deplete. I voted for sale.”

Share price rises

There has been intense speculation about the business going under the hammer, and this has pushed the share price of GPI to nearly double in the past 3-4 months, sources in the know told BusinessLine.

GPI’s share price rose to a high of ₹1,480 on January 21. The scrip’s 52-week low was ₹675, in August 2019. The current market-cap of GPI is over ₹7,000 crore.

The KK Modi group has transferred all family shareholdings into the trust to ensure that none of the beneficiaries own any shares. Other Trustees of KK Modi Trust include Bina Modi, Charu Modi and Sameer Modi.

Disposal of trust fund

“There is a proposal that the KK Modi Family Trust may consider disposal of its trust fund. It has been proposed to discuss with you a possible mandate for assistance in sale process of assets of the KK Modi Family Trust,” said a letter written to Morgan Stanley by Titus Advisors on December 27, 2019.

The KK Modi family members have been embroiled in a dispute over the division of assets, especially after KK Modi, the head of the family, passed away in November 2019.

Published on January 27, 2020

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