The Hindu Business Line : Tata Tea to divest stake in northern operations

NEW FOCUS: Mr R.K. Krishna Kumar (right), Vice-Chairman, Tata Tea Ltd, and Mr Iyad Malas, Director (South Asia), International Finance Corporation, at a press conference in Mumbai on Monday. — Paul Noronha

Advertisement

Mumbai Feb. 19 Tata Tea Ltd on Monday announced that it will divest the controlling stake in its north India plantation operations to a new company.

While Tata Tea will hold 20 per cent equity in the new company, International Finance Corporation, a subsidiary of the World Bank, and IL&FS will hold 20 per cent each.

In addition to the three principal shareholders, Globally Managed Services (GMS), which is engaged in field work from non-tea operations, will also hold a minority stake, along with plantation employees.

The new entity will be operating all the 20 gardens that Tata Tea owns in Assam and five in West Bengal, the total land holding being about 20,000 hectares.

The plantation assets will be transferred to the new company for an enterprise value of Rs 360 crore.

The new company, to be named Amalgamated Plantations Ltd, will take over the plantation operations from April 1, 2007.

Last year, Tata Tea undertook a similar re-structuring of its plantation business in south India, as part of an exercise to further sharpen its focus on the branded and specialty tea business.

New pursuits

Mr R.K. Krishna Kumar, Vice-Chairman of Tata Tea, told reporters that the new company will be pursuing crop diversification and move into agri-products.

"The intent is to ensure that the tea operations achieve a new level of stable profitability because of new streams of income," he said

Significantly, the Assam Government has permitted the company to use 5 per cent of the total land holdings in the State under tea plantations to pursue multi-crop cultivation.

The company is awaiting a similar approval from the West Bengal Government.

It intends to use the 5 per cent land holdings for fishery, horticulture and floriculture projects, apart from growing vegetables and spices.

Later, it may also take up hatchery and other projects.

In response to a question, Mr Krishna Kumar admitted that 5 per cent of land holdings for multi-crop projects is less.

"But we have to first prove our success in multi-crop agriculture, before we approach the Government again for increasing the extent of land for crop diversification," he said.

More Stories on : Tea | Restructuring | Horticulture/Fruits & Vegetables | Tata Tea Ltd

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
Easterlies drive rain in South

We need land, water policies for industrialisation

Volatile construction stocks upset funds' NAVs

DGH disallows ONGC's gas discovery in KG basin

Indian power cos flock to Africa, Middle East

Tata Tea to divest stake in northern operations

Ceat plans to set up truck radial facility

TCS' defence, aerospace designs set for takeoff

Hind Copper to outsource mining to Australian co

Benchmarks lack direction in dull trade

SBI raises PLR by 75 bps

Sub-prime rates moving up

`Punish cos for Clause 49 non-compliance'

Bharti to invest $2.5 b in retail venture by 2015