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Tata Tea rejigs SPV debt portfolio

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Our Corporate Bureau Mumbai
Tata Tea has restructured the debt portfolio of Tata Tea (GB), the special purpose vehicle (SPV) that holds 100 per cent equity of the UK-based Tetley Group.
 
It has refinanced its entire debt of pound 184 million (Rs 1,527 crore), the weighted average interest of 2.95 per cent per annum plus Libor to pound 160 million at an average interest of 1.40 per cent per annum plus Libor. It is expected that the company would annually save in interest costs to the tune of pound 2.75 million (Rs 23 crore).
 
The term component amounting to pound 75 million (Rs 623 crore), is subject to bi-annual repayment and the entire debt facility is for a period of 5 years. The loan has been jointly arranged by Rabo Bank India and Rabo Bank International, London, with the latter underwriting the facility.
 
In a release issued to the media, Tata Tea said that the residual debt outstanding, as on February 4, out of the first refinance that was concluded in February 2003 has been fully paid off and replaced by a fresh more cost-effective debt. The Tatas acquired Tetley in March 2000. From a high debt equity ratio of 3:1 to 1.8:1 in February 2003, it will now be down to 1.6:1.
 
The refinancing initiatives have allowed improvement in the Tetley Group's cash flows which would enable the company to invest in its brand globally, launch new products and consolidate its market share in key geographies, together with an ability to launch the brand in emerging markets.

 
 

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First Published: Mar 10 2005 | 12:00 AM IST

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