The Tata Group restructures shareholding pattern in North Indian Plantation Operations

The shareholding pattern of Amalgamated Plantations Private Limited (APPL), the new company formed by Tata Tea after restructuring its North Indian Plantation Operations (NIPO), is close to finalization. The Tata Group will hold 33-35% in APPL through Tata Investment Corporation (15%) and Tata Tea (18-20%). IL&FS and the World Bank private equity firm IFC will hold 20% stakes each in APPL, while consultancy firm Globally Managed Services will hold 12%. The balance 13-15% will be held by employees and workers of the company.

The company has received SEBI approval for the formation of APPL. Once we get shareholders’ approval, the company will come into existence with effect from April 1, 2007. The transaction process, however, remains to be completed.

Read more in The Economic Times article.
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Tata Tea to divest stake in tea plantations to IFC, IL&FS, workers

Tata Tea to divest stake in tea plantations to IFC, IL&FS, workers

Tata Tea will divest 80% in its North Indian Plantation Operations (NIPO), and will spin it off to a number of investors and workers. The value of Tata Tea’s 80% stake in NIPO, which consists of 24 estates in West Bengal and Assam, is pegged at Rs. 290 crores, with the entity’s total valuation at Rs. 359 crores. The separation of NIPO will be effective April 1, 2007.

The company will detach itself from plantation management with the divestment. A couple of years ago, Tata Tea handed over the management of its south Indian plantations to its workers. The management of the company will be vested with the workers and Tata Tea will handle the marketing and distribution of NIPO’s produce. World Bank PE arm International Finance Corporation (IFC) and ILFS will each pick up a 20% stake in NIPO. This will be IFC’s first overseas investment in the plantation sector.

Globally Managed Services (GMS), a firm promoted by Mumbai-based Assamese consultant Ranjit Barthakur may pick up 10-15% and the workers of the 24 estates another 15%. The balance will be held by a couple of agri-companies. The agri-companies are being roped in to cash in on Tata Tea’s multi-cropping activities, so that NIPO emerges as an agricultural company with tea as its mainstay.

IFC and ILFS may likely pay nearly Rs. 72 crores each for their acquisition, while GMS will pay Rs. 36-54 crores, depending on the size of its shareholding. The workers will have to shell out Rs. 54 crores; the amount is planned to be raised through loans from the company spread over 5-10 years.

Read more in the Business Standard article.

The Tata Group may hive off water business

The Tata Group may spin off its bottled water business into a separate company. The group’s bottled water business currently includes a 30% stake in US’ third largest bottled water company Energy Brands, Inc. (Glaceau). The group is also believed to be in talks to acquire Dadi Balsara’s Himalayan water brand. Energy Brands is an associate company of the group. Tata Tea holds a 25% stake in it, while the remaining 5% is held by a subsidiary of Tata Sons, the Tata Group’s holding company. The ideal combination is to develop a complete spread of offerings, from tea and coffee to water, under a single company, to cover the entire spectrum of beverage consumption.

Article in Business Standard.