may divest stake in Sri Lankan plantation
The Tata Tea is trying to relinquish
its 50 percent stake in Estate Management Services Limited
which owns Watawala Plantations Ltd in keeping with
the Indian giant’s policy to move away from plantation
“However they will concentrate
more on their brands and our joint venture with Tata
Tea of India in the brands category will continue,”
G. Sathasivam, Chairman Watawala Plantations Limited
told The Sunday Times FT.
“Watawala is not being sold.
What is considered for sale by Tata is Estate Management
Services Private Limited (EMSPL) owned 50 percent each
by Sunshine Holidays and Tata Tea of India. Tata is
considering selling their holding and the due diligence
of this process will begin soon,” he further explained.
Tata had invested in Sri Lanka through a joint venture
with Watawala Plantations, which sells Ceylon tea under
the brand names of Zesta and Watawala.
Richard Pieris and Company, amidst
wide speculation that the company may be keen, is not
interested in the EMSPL stake because the ‘price
is not right’, a company source said.
Tea industry players are speculating
that the buyer could be either James Finlays or Watawala’s
next largest shareholder Mouldex Ltd which has a 20.26
Despite market rumours that Sunshine
Holdings will buy Tata’s 50 percent, Watawala
company sources said that it is not possible due to
restrictions in the joint venture that the two companies
have entered into.
Watawala Plantations is spread over
an area of 12,442.13 ha (hectares) out of which 41 percent
is tea, 18 percent is rubber and eight percent is under
palm oil cultivation.
Last year, Tata’s sold its Indian
plantations by transferring tea estates to an employee-owned