HUL shares gain over 1% after it sells bread and bakery business to Everstone

At 9.30 am, HUL shares were trading 1.61 per cent higher at Rs 812. (Photo: PTI)

Hindustan Unilever (HUL) shares gained over 1 per cent in the early trade on Wednesday after the company said on Tuesday (post market hours) that it had signed an agreement for the sale and transfer of its bread and bakery business under the “Modern” brand to Nimman Foods, an investee company of the Everstone Group, for an undisclosed consideration.

At 9.30 am, HUL shares were trading 1.61 per cent higher at Rs 812. It opened at Rs 805 and had touched a high and low of Rs 812.45 and Rs 805, respectively, in trade so far. Sensex was up 1.53 per cent at 25,726.

In a BSE filing, the company said, “HUL’s decision is in line with its strategy to exit non-core businesses, while continuing to drive its growth agenda in the core packaged foods business.”

The transaction is subject to statutory approvals and requisite clearances. It includes sale and transfer of the ‘Modern’ brand and business on a going concern basis. HUL and Everstone will work together to secure the necessary approvals to complete the transaction over the next few months. HUL will continue to manage the operations until the completion of the transaction.

HUL’s bread and bakery business consists of a full range of white and sweet breads, health and wellness breads and value added bakery products such as cakes, muffins, buns, pavs, cream rolls under the “Modern” brand name. The business currently has six own operating manufacturing units and a network of franchisees across India.

The promoters holding in the company stood at 67.22 per cent while institutions and non-institutions held 18.74 per cent and 14.04 per cent, respectively.