New Delhi: Tata Global Beverages Ltd (TGBL) on Thursday said it had agreed to sell its 31.85% stake in Watawala plantations in Sri Lanka to Colombo-based Sunshine Holdings Plc.
In line with its strategy of focussing on packet tea businesses in key geographies, TGBL will sell its stake in joint venture Estate Management Services Pvt. Ltd, the managing agent for the Watawala plantations, for Rs120 crore, it said in a regulatory filing.
TGBL’s shares rose 0.5% at Rs306.6 on BSE, while the benchmark Sensex fell 0.19% to close at 33,848.03 points.
Following the exit of TGBL, Watawala plantations will become a joint venture between Sunshine Holdings, the dominant shareholder, and Singapore-based Pyramid Wilmar Plantations Pvt. Ltd.
TGBL, the erstwhile Tata Tea Ltd, had acquired a majority stake in Watawala plantations in 1996. In 2013, its stake in Estate Management fell from 49% to 31.85% when Pyramid Wilmar Plantations came in as a new partner. The book value of its investment, or the actual amount of money spent to acquire the interest, was Rs14.57 crore, according to TGBL’s latest annual report.
Apart from tea, Watawala plantations produce palm oil and dairy products.
Over the years, TGBL has been withdrawing from the plantations business. In 2005, it restructured its Indian plantations by creating two separate companies while divesting direct control among workers .
The company, however, continues to own 41% in Amalgamated Plantations Pvt. Ltd, which owns estates in West Bengal and Assam, and 28.5% in Kanan Devan Hills Plantations Ltd, which has gardens in Kerala. Both the companies have lately been running losses.
Tata group chairman N. Chandrasekaran had said at TGBL’s annual general meeting in August that the management was reviewing its investments in plantations, adding that a decision was soon to be taken about the two Indian plantations in which the company was still invested.