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April 20, 2001
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Money > Business Headlines > Report April 20, 2001 |
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Magor to ratify split with Khaitan on April 24Ishita Ayan Dutt London-based Philip Magor on Thursday confirmed that his company was to take full managerial control of George Williamson (Assam), dissociating itself from the B M Khaitan family on account of differences in the business interest of the two. This would be ratified on April 24 at a board meeting of George Williamson. Magor is expected to step down from his positions in Khaitan-held companies such as Eveready Industries on that day. In a statement, Magor, chairman of Williamson Magor Tea Holdings Plc, said, "Our motto for years has been to 'stick to tea' and that's exactly what we are doing," hinting at his disapproval of the Khaitans' move to mix the business interests, namely batteries and tea. "It is the intention that crossholdings should be eliminated in time, subject to regulatory approval," Magor added. Emphasising on quality, Magor said, "In the last few years, we have been increasingly focused on the production of high quality tea -- this is what we believe our customers want. It makes more sense for us to control the whole production process so that we can achieve the consistent standards of quality we are looking for." "In future tea sold by us will be produced on our own estates to our own demanding standards of quality," he further added. The Magor company George Williamson (Assam) will be renamed Williamson Tea Assam as part of the split and would continue to expand the areas under its cultivation through judicious acquisition of tea estates in Assam. "We are long term buyers, not sellers," said Magor. He also confirmed that the new managing director of Williamson Tea Assam would be S K Mitra, who is at present the Williamson Magor group chief financial officer. However, the crossholdings between Magors and Khaitans may continue for some more time. Aditya Khaitan, a director of the Williamson Magor group and the youngest son of B M Khaitan, said that the two groups involved may not relinquish their interest in the companies immediately. Khaitan explained that though the Magors have a stake in Bishnauth, they do not have any interest in Eveready Industries India and, hence, their stake in the merged (Eveready and Bishnauth) entity would be miniscule. Further, the Magors have a 27 per cent stake in the holding company Williamson Magor & Co, but this company has insignificant stake in the tea companies. The division of the 55-million kg tea group would create two entities, one of 35 m kg crop size under the Khaitans and another with a crop of 20 m kg under Magors named Williamson Tea Assam. The Khaitans recently resorted to sale of tea gardens of Eveready and Bishnauth to retire debts. The group was also negotiating with George Williamson for sale of two of Bishnauth's gardens. Brushing aside all speculation, Khaitan termed their continuing relation as "cordial", while Magor stated, "This arrangement is entirely amicable and reflects the various parties long term strategic interests". The pie that is being divided has recently been valued. Bishnath Tea Gardens have been valued at Rs 4 billion and Eveready gardens at Rs 6 billion, while the worth of George Williamson (Assam) was felt to be Rs 4.35 billion. Powered by YOU MAY ALSO WANT TO READ:
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