McDonald’s JV partner Vikram Bakshi seeks higher valuation for stake
Bakshi says the US fast food chain had benefited from his active acquisition of key real-estate locations to open outlets in northern and eastern India
New Delhi: Vikram Bakshi, the estranged partner of McDonald’s Corp., said on Tuesday that the US fast food chain had benefited from his active acquisition of key real-estate locations to open outlets in northern and eastern India, as he seeks a higher valuation for his stake in their joint venture.
Connaught Plaza Restaurants Pvt. Ltd, the joint venture for the north and east, acquired some 92 properties for the restaurant chain under the oversight of Bakshi, and they were estimated to be valued at between ₹ 538.98 crore and ₹ 751.48 crore, Bakshi’s counsel argued before the Company Law Board (CLB).
The valuation was based on a 2008 report by realty consulting company CBRE, the lawyer submitted.
Bakshi, added the counsel, worked towards acquiring these locations at the best market rates, long-term leases for which are likely to benefit McDonald’s over the next two decades.
“As a joint venture partner, I’ve got these properties at lower than market rates, for the benefit of the company and that resulted in reduction in capital expenditure," Bakshi’s lawyer S.N. Mukherjee argued in front of a CLB bench headed by B.S.V. Prakash.
The two partners are negotiating a valuation for Bakshi’s stake in the joint venture, which operates 165 restaurants.
While Bakshi has sought ₹ 1,800 crore for his 50% stake, McDonald’s has offered ₹ 40 crore to buy out Bakshi’s stake.
Mukherjee added that a split between the two partners was inevitable, almost a year after Bakshi went to court against the world’s largest hamburger chain.
In September last year, Bakshi, who was ousted as managing director at Connaught Plaza Restaurants that operates McDonald’s outlets in north and east India, moved the CLB clear allegations made against him by the US fast food chain that said Bakshi was no longer in charge of running the business.
McDonald’s entered India in 1996 through two partners, one for the north and east and the other for the south and west.
The dispute is to be heard over the next two days.
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