The Hindu Business Line : Khaitans to merge WTA into McLeod Russel

FIVE months after announcing the acquisition of the 17 gardens of Williamson Tea Assam Ltd (WTA) of the London-based Magors, the Khaitans has initiated a consolidation act.

The BM Khaitan Group has decided to merge WTA into its tea outfit, McLeod Russel India Ltd. A formal notice was sent to the stock exchanges stating that the matter will be considered in the next board meeting scheduled on Monday.

With this development, McLeod Russel's dominance as the world's largest bulk tea producer will increase, as its annual production will jump to 62 million kg. Its total garden strength will increase too. Apart from the 17 gardens of WTA, McLeod Russel currently owns another 23 tea estates in Assam and five more in Dooars.

On Monday, the boards of both the companies are meeting on the merger issue. They will also finalise their second quarter and half yearly results. It may be noted that the existing paid-up capital of WTA is Rs 14 crore and McLeod Russel's is Rs 28 crore. However, while the face value of a WTA share is Rs 10 that of McLeod Russel is Rs 5.

In the last one month, McLeod Russel has also completed the mandatory open offer for the minority shareholders of WTA. The formal acquisition of WTA was made in June this year when McLeod Russel bought 100 per cent of Borelli Tea Holdings Ltd, UK, from Williamson Tea Holdings plc, London, which held 70 per cent of WTA.

The total cost of the acquisition was £21.35 million or Rs 168.66 crore. The Khaitans paid Rs 170 per share for WTA to the Magors. It includes a non-competition fee in the Indian tea market of Rs 30 per share.

Company sources said that operation integration of both the organisations is also over. "There was hardly anything to do on this front because four years back all these gardens were under the same management", they said.

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