This comes after the firm sold its stake in Watawala Plantations in Sri Lanka last month and is the latest move to focus on its core branded tea, coffee and water products.
Amalgamated Plantations has 21 estates in Assam and four in West Bengal covering more than 23,000 hectares in total. It produces 40 million kilogrammes of tea annually, with a turnover of Rs500 crore (about US$78.8m). It lists 31,000 employees.
Tata Global Beverages is expecting to sell it for about Rs1,300 crore (about US$204.8m) and is currently assessing interest from potential investors.
Amalgamated Plantations announced in November that it needed to diversify its business to make up for accumulated losses and to venture into the packet tea business, without relying on Tata Global Beverages.
Other recent developments
In end-December, Tata Global Beverages sold its stake in Sri Lankan joint venture Estate Management Services Pvt. Ltd., the managing company for Watawala Plantations.
In a regulatory filing to the stock exchange, the company said it “divested its holdings of 1,20,78,406 shares in its joint venture, EMSPL, constituting 31.85% of the issued capital of EMSPL for a consideration of about Rs120 crore (US$18.7m).”
It stated that this move was in line with its strategy of focusing on its “branded business in key geographies”.
Watawala Plantations has become a joint venture between majority shareholder Sunshine Holdings and Singapore-based Pyramid Wilmar Plantations Pvt. Ltd.
Shares of Tata Global Beverages hit a 52-week high after the sale, gaining 1% in early trade that Friday.
Before that, in August, Tata Global Beverages had exited Russia and China. Its Russian tea and coffee operations were sold to Skodnya Grand for an undisclosed amount and it also sold off its 90% stake in Zhejiang Tata Tea Extraction Co in China for about Rs17.5 crore to its minority joint venture partner Zhejiang Tea Group.
A long time coming?
The group began withdrawing from its plantation businesses in 2007 when Tata Tea in Assam and West Bengal were hived off and transferred to Amalgamated Plantations.
It was further reported that company employees were given equity interest in Amalgamated Plantations as well as in Kanan Devan Hills Plantations Co. Pvt. Ltd. — launched in 2005 to transfer Tata Tea’s plantations in Munnar — in which Tata Global Beverages continues to own a 28.5% stake.
Both companies have been running at a loss in recent times.
At Tata Global Beverages’ annual general meeting in August last year, Tata Group chairman N. Chandrasekaran said that the management was reviewing its investments in plantations.