KARACHI, March 30: Six parties remain in the run for purchase of Dalda business of Unilever Pakistan, and the transactions is expected to be completed within the next four weeks.

After months of deafening silence on the matter, Unilever Pakistan's financial advisers, Hong Kong Shanghai Banking Corporation (HSBC) finally came out on Tuesday, with what it termed was its "first official press release" on the subject.

The bank recalled that Unilever had successfully divested its edible oil businesses in India and Nepal, and in both those countries it had acted as their financial adviser to help sell the business.

"HSBC has also been appointed as the financial advisers to sell Dalda business in Pakistan," the bank said and added that the internal process of which had started since October. "We are hopeful of a successful sell-out within four weeks," the bank said.

The statement issued by Unilever's financial advisers (HSBC) is being quoted here verbatim: "Unilever Pakistan has appointed HSBC as financial advisers to sell their edible oil business along with assets and brand "DALDA".

The process started in January 2004 where 16 parties showed interest in the business and confidential information memorandum was issued to them. Out of these, 12 parties participated in non-bidding bid.

After intensive and transparent evaluation, six parties were selected and due diligence and negotiations are in progress. The parties involved in final negotiations are representing Fauji Foundation, Habib Oil Group, Soya Supreme Group, Unilever Employee Welfare Group, Savola Group (Saudi Arabia) and Candyland Group."

The bank further stated that the parties named had shown 'keen interest' and the deal should be finalized by the end of April. Interestingly, HSBC asked press to refrain from asking "further questions", in the interest of what it called maintenance of "confidentiality and transparency of the sell-out".

But for all that, HSBC might perhaps want to answer some of the itching questions in its "second official press release". The sock exchange might also take an issue on the release of 'price-sensitive' information directly to the press, instead of routing it through the bourse.

The press release also does not clearly say, but the transaction is perhaps taking shape on negotiated basis and not through open bidding as is being done by the Privatization Commission.

Under the negotiated basis, the seller chooses a party based on the criteria that does not include price but other considerations such as whether they are a competitor in other businesses to the seller.

Such approach is also practised in private businesses to sell strategic assets. The "non-bidding bid" is also a term not quite familiar in earlier transactions in the country.

Market sources are speculating on figures of around Rs900 million to Rs1 billion that Unilever is likely to fetch from the sale of Dalda business. The sell-off would also possibly result in a one time cash inflow in 2004 for the company and a high cash dividend for the year and possibly improved profitability in the longer run.

Unilever Overseas Holding Limited, London, is the largest shareholder in its Pakistani ubsidiary, holding around 67 per cent of the 136 million outstanding shares. The Unilever Pakistan stock trades at the highest price, among all scrips quoted on the Karachi Stock Exchange; the current price running at Rs1540 for the 50-rupee share.

For decades, 'Dalda' has been a household name in the sub- continent. Its business grew more rapidly after Lever Brothers, London, affiliated with old time industrialist Kassim Dada's brand of ghee called 'Dada'.

Lever took stake in Kassim Dada's flourishing business at the time. The one thing that the foreign partner asked was to add Lever's first letter "L" in between "Dada".

But past is another country. The company's edible oil business was now facing almost a loosing battle with the combined pressure from smuggled, unbranded and competitive local ghee and cooking oil brands.

Yet, it is the prospective buyers, who naturally seem to see hope in the revival of the business, regarding the current downturn to be, but "cyclical".