Tata Tea picks up 6.8%
in Tata Coffee
Tata Tea has consolidated its position
in Tata Coffee by meeting its commitment
in the rights issue of Tata Coffee. It has
acquired 6.8 per cent in Tata Coffee through
the issue and also by subscribing to the
Tata Tea had a stake of
50.67 per cent in Tata Coffee prior to the
acquisition, which now stands at 57.48 per
cent, according to an announcement made
to the stock exchanges.
Tata Coffee had made its
first announcement on the rights issue in
March last year to raise close to Rs 130
However, the process got
delayed and there were adjustments with
regard to the instrument through which resources
were to be mobilised. It was decided in
July to raise close to Rs 250 crore through
partly convertible debentures.
In June, Tata Coffee Limited
acquired Eight ' Clock Coffee Company, US,
from Gryphon Investors for $220 million
(Rs 1,015 crore).
The increased infusion
of funds was to part-fund the recent acquisition
and also for other capex plans like a freeze-dried
plant at Theni (Tamil Nadu) and a coffee-processing
unit in Uganda.
Tata Tea had later announced
its firm commitment in Tata Coffee's rights
issue, where they were required to put in
a minimum of Rs 125 crore. Tata Coffee had
issued 62.34 lakh partly convertible debentures
(PCDs) with a coupon of seven per cent in
the ratio of 1 debenture for every 2 equity
shares held as on a record date. Each debenture
will have a face value of Rs 400 and comprises
Part A of Rs 250 will
be converted into one fully-paid equity
share of Rs 10 on allotment. Part B of Rs
150 will be non-convertible and will be
redeemed in equal instalments of Rs 50 each
at the end of fourth year, fifth year and
sixth years from the date of allotment.
The non-convertible portion will carry a
coupon rate of 7 per cent per annum.
Tata Sons, the holding
company of the Tata Group, has been recently
consolidating its stake in various group
companies including Tata Steel, Tata Chemicals,
Titan Industries, Tata Tea and lately in
Trent Limited through preferential allotment.