The Hindu Business Line : Swap ratio for Williamson, McLeod Russel merger soon

THE BM Khaitan group has appointed ICICI Securities and PricewaterhouseCoopers for working out the details of the merger of Williamson Tea Assam Ltd (WTA) with McLeod Russel India Ltd (MRIL).

According to Mr Deepak Khaitan, Vice-Chairman of MRIL, the swap ratio is likely to be announced within the next 10-12 days.While the face value of the MRIL scrip is Rs 5, that of WTA is Rs 10. Mr Khaitan said that the face value of the share of the merged entity would be Rs 5.

MRIL recently concluded an open offer for WTA's minority shareholders but managed to buy only around 22,000 shares (0.16 per cent). With this, the Khaitans' stake in WTA has gone up to 70.16 per cent.

The Khaitans have decided to develop MRIL as an agricultural company only, and are now preparing an "alternative crop strategy", which is likely to be announced in April 2006.

"We are looking at all options like bio-diesel, bio-medicine, coffee, rice, wheat, soya, and others. We may acquire land in some States, and this can even be outside Assam and West Bengal. A core team is preparing the details of this new business plan," Mr Khaitan told newspersons.

For the year ended March 2006, the turnover of the combined entity is projected to be Rs 500-550 crore. Total tea production is likely to increase to 62 million kg from the current level of 60 million kg.

For the half-year ended September 2005, WTA's gross sales dropped to Rs 76.65 crore against Rs 92.25 crore. Net profit dropped to Rs 26.33 crore from Rs 29.28 crore earlier.

During the same period, gross sales dropped to Rs 135.16 crore from Rs 147.81 crore but, riding on other income of Rs 22.39 crore, net profit jumped to Rs 41.52 crore from Rs 28.06 crore.

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