Tata Tea, union may buy 40% in NIPO

Tata Tea and its workers' co-operative may pick up 40 per cent stake in NIPO "� the tea firm's north Indian plantation operations, which will be spun off into a separate entity.

Sources close to the development said the broad contours of the spin-off scheme suggested that Tata Tea and the workers' co-operative would hold 40 per cent in NIPO, while the remaining 60 per cent would be acquired by financial institutions (FIs) and funds.

Tata Tea would acquire the stake against transferring its tea estates in the region -- four estates in West Bengal and 20 in Assam -- to NIPO.

The Tata Tea board will meet on Thursday to discuss ways for raising the funds. Tata Tea MD Percy Singaporia declined to make any comments on this.

The company would continue to look after marketing and packaging, while workers would take care of production, they added.

The sources said the Tata group outfit, which is in the midst of restructuring in its bid to emerge a beverage company from a plantation firm that sells tea, was likely to announce the spin-off of NIPO very soon.

Washington-based IFC and IL&FS would pick up 15-20 per cent each in NIPO, while an Assam-based investor, who had worked with Tata Tea earlier, would also have equity exposure, they said.

According to a presentation to the trade unions, the Tata Tea management asked "workers to pay Rs 8,000 each, staff to chip in Rs 15,000-20,000 each and managers Rs 1-1.5 lakh each for their equity acquisition". "However, we have not made up our mind so far," said trade union leaders.

Workers were recently taken to south India to give them a feel of the operations of Kanan Devan Hills Plantation, which was formed by carving out the south Indian operations of the company.

Tata Tea might list NIPO after spinning it off into a separate entity, sources close to an FI said.