FIs may acquire stake in Tata Tea gardens

International companies in the non-tea space are likely to pick up stake in Tata Tea's hived off Amalgamated Plantations, formerly North India Plantation Operations.

"After the court approves the demerger, the company will have to get response from the workers," L Krishna Kumar, group chief financial officer (CFO), Tetley said. Depending on workers' participation, the shareholding of the Tata group and international companies would be determined.

The participation of the international companies could be in the range of 15 to 20% while other stakeholders in the venture--IFC, IL&FS, and the Tata group""could hold 20% each. However, the shareholding pattern is subject to workers' participation.

"The international investors would have expertise in the non-tea business. Tata Tea is already running non-tea pilot projects in Assam," Kumar said.

Krishna Kumar said, fisheries, jatropha, fruits and vegetables could be possible revenue streams but declined to indicate revenues that could be generated from the non-tea businesses.

It was in keeping with the diversification plans that the non-tea companies could participate in Amalgamated Plantations.

Hardeep Singh, who was chairman of Cargill India, is now the chairman designate of Amalgamated Plantations. Cargill happens to be an international provider of food, agricultural and risk management products and services.

The scheme of arrangement and reconstruction for transfer of North India plantations business to Amalgamated Plantations has already been approved by shareholders. The transfer would be effective on receipt of final approval from the high court.

Ken Pringle, executive vice chairman and chief executive officer, Tetley and on the board of Tata Tea said plantations resulted in social obligations.

Earlier, Tata Tea had hived off its South India Plantation Operations as an employees' cooperative, Kanan Devan Hills Plantations.

The restructuring was part of Tata Tea's move to becoming a branded beverage company.

Pringle said the company would grow the Good Earth brand. In 2005, Tetley US Holdings acquired US-based FMALI Herb and Good Earth Corporation.

Good Earth had ventured into organic tea and could even move beyond the beverage space, Pringle said."We have to see how far we can stretch the brand," he said.