Hindustan Unilever's ice cream demerger plan gets NCLT's approval

The ice cream business forms 3 percent of HUL’s total yearly turnover, contributing Rs 1,800 crore to the total revenue.

National Company Law Tribunal’s (NCLT’s) Mumbai bench approved the demerger of Hindustan Unilever’s ice cream business into Kwality Wall’s (India) Ltd (KWIL), an exchange filing said on October 30.

The nod clears the way for the FMCG major’s long-awaited proposal to separate its ice cream business into a separate entity. The Mumbai NCLT bench granted the approval under sections 230 to 232 and other applicable provisions, the filing said. The latest development is also part of the HUL’s parent firm Unilever’s plans to demerge its ice cream business into an independent unit.

Under the arrangement, HUL will transfer all of its ice cream brands such as Kwality Wall’s, Cornetto, Magnum, Feast and Creamy Delight to the new entity.

The ice cream business forms 3 percent of HUL’s total yearly turnover, contributing Rs 1,800 crore to the total revenue.

Under the demerger scheme, shareholders will receive one share of KWIL for every share held in the FMCG major. Moreover, Magnum HoldCo will buy 61.9 percent stake in KWIL and the rest will be held by HUL shareholders.