According to a recent report by CNBC-TV18, Godfrey Phillips is going to sign a term sheet with the start-up New Shop for the sale of its retail business 24Seven.
CNBC-TV18 reported that after the signing of the term sheet, the two parties want to close the transaction by the end of this month. Sources have also validated the initiation of the transfer of shops and assets of the retail business to the New Store.
The board of Godfrey Phillips decided to exit the retail business in April 2024. The resolution came amid a serious inheritance dispute between Bina Modi, MD of Godfrey Phillips, and her son Sameer Modi, the current Executive Director. Sameer Modi had opposed the sale of the retail business. However, in July 2024, a court in Delhi dismissed Sameer Modi’s concerns, allowing the company to decide on the future sale of the retail business.
Founded in 2019, the retail start-up, New Shop operates across 35 cities, with 160 convenience stores, operating 24 hours.
Godfrey Phillips - The Brand
Godfrey Phillips, hugely popular for its cigarette brands - Four Square, Red & White, and Cavanders, was established in 1936. It made an exclusive sourcing and supply pact with Philip Morris International to even make and distribute the Marlboro brand in India. Over the years, the group has diversified its business. In 2010, it entered the retail sector to tap into the growing consumption market. 24Seven had more than 150 stores across Delhi NCR, Punjab, and Telangana, with gross sales of Rs 484 crore.
The Legal Battle Between Heirs
The ongoing promoter dispute at the KK Modi Group, specifically at Godfrey Phillips, started in 2019 with the death of KK Modi. After his demise, the baton was passed to his wife Bina Modi and that initiated a succession battle with her sons - Samir Modi and Lalit Modi.
Lalit disagreed with Bina Modi’s elevation as MD of Godfrey Philips and started arbitration proceedings against her. He advocated selling off the business and distributing sale proceeds within the family. In a recent interview with CNBC TV18, Samir Modi backed his brother to sell the company and end the dispute.
According to CNBC-TV18, Samir Modi's bid for reappointment as Director was ruled against by the Nomination and Remuneration Committee (NRC). This is why the upcoming AGM on Sep 6 is significant.
Shareholders will now decide on two crucial parameters - One, whether to reappoint Bina Modi as MD. And the second one is whether to eliminate Samir Modi from the Board. According to sources, Samir Modi stood against the reappointment of Bina Modi as the MD of Godfrey Phillips.
/startuppedia/media/media_files/J22pWoGoAQMRskDasc40.png)