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Khaitans to retain 9% in George Williamson

Our Bureau

KOLKATA, May 1

THE B.M. Khaitan group will retain, ``as a goodwill gesture'', its nine per cent stake in the tea outfit, George Williamson (Assam) Ltd (GWA), over which the Magors of the UK, with a 70 per cent stake, are in the process of establishing direct management control in terms of an ``amicable parting of ways'' recently agreed to by the two sides.

Second, the B.M. Khaitan group has proposed to operate its tea business as Williamson Tea Company Ltd after the tea business is segregated from Eveready Industries India Ltd. The tea business is to comprise the gardens of Eveready and Bisnauth Tea Ltd, w hose merger with the former with retrospective effect from April 1, 2000 is to be effective very soon.

The group has made these announcements in a press note, which also points out that the `Williamson Tea' logo ``is the registered property of the Khaitans''.

In the context of crossholding of shares, the press release informs that the Khaitans will buy out the 27 per cent that the Magors hold in Williamson Magor Ltd, ``subject to the various Government approvals that may be required for this buyout''.

It is relevant to mention in this connection that the press note is silent on the third case of crossholding -- Williamson Financial Services Ltd, in which the Magors are known to have 9.8 per cent (the Khaitans hold 67.3 per cent).

Meanwhile, as part of the process of ``amicable parting of ways'' in the tea business of GWA, the Magors of the UK and the B.M. Khaitan group have apportioned the common services in a manner that spares either side of any extra burden.

The B.M. Khaitan group is confident of forging ahead in tea production, given the ``adequate number of competent people'' available with it. According to a senior group source, ``moreover, Mr J.M. Trinick, the veteran technical expert, who has stepped do wn from the GWA board, has agreed to continue his association with the Khaitans''.

Against GWA's production of around 20 million kg (mkg), the Khaitans right now command production of 35 mkg. They have already indicated that they intend to sell some more tea estates with a view to reducing debts. After the identified gardens have been sold, possibly over the next 4-5 weeks, the group's tea production may be 32-33 mkg.

According to the source, the separation will afford the Khaitans greater flexibility in marketing of tea. Going by its assessment of the market from time to time, it will be free to decide if at any point of time it should sell more in the outmarkets wit h corresponding adjustments for domestic sales and vice versa.