Tata Consumer Products (TPCL) said it plans to reorganize its India and overseas business.
The plan includes the demerger of the plantation business of Tata Coffee (TCL) into TCPL Beverages and Foods (TBFL), and the merger of the remaining business of TCL, consisting of its extraction and branded coffee business with the TCPL, through a composite scheme of arrangement.
Besides, TCPL proposes to purchase the minority interest in its UK subsidiary, Tata Consumer Products UK (TCP UK) by way of a share swap, through a preferential issue of its equity shares.
"These actions further TCPL's objective of creating a future-ready organization and will act as a stepping stone for further simplification. These will also result in operational efficiencies, faster decision making and execution, creation of focused business verticals, and unlocking of potential synergies," the company said in a statement.
As per the statement, the Board of Directors of Tata Consumer Products and Tata Coffee, at their respective meetings held on Tuesday, have approved the combination of the plantation business of TCL with TBFL and the non-plantation business with TCPL through a composite scheme of arrangement for demerger and merger.
"On the effectiveness of the scheme, the shareholders of TCL (other than TCPL) as on the record date will receive an aggregate of 3 equity shares of TCPL for every 10 equity shares held by them in TCL, through the issuance of 1 equity share of TCPL for every 22 equity shares of TCL, in consideration for the demerger and 14 equity shares of TCPL for every 55 equity shares of TCL, in consideration for the merger."
"TCPL shareholders are expected to benefit from better synergies and business efficiencies going forward."
The company said that the scheme is subject to the necessary statutory and regulatory approvals including approvals of the respective benches of the NCLT, the stock exchanges, SEBI, and the respective shareholders of each of the companies.
On the consolidation of interest in TCP UK, the company said its Board has approved the purchase of 10.15 percent minority interest in its UK subsidiary from Tata Enterprise (Overseas) AG, Switzerland (TEO).
"As consideration, TCPL will issue 74,59,935 equity shares i.e. 0.80 percent stake (computed on post preferential issue basis) to TEO, by way of the preferential issue in accordance with the applicable regulations."
The transaction is subject to TCPL shareholders' approval and other regulatory approvals, as may be required under applicable law. Consequently, these transactions will result in TCPL having 100 percent ownership of the business of TCL and of TCP UK.