Tatas make Rs 2,125 cr in 9 months on US sale | business | Hindustan Times
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Tatas make Rs 2,125 cr in 9 months on US sale

business Updated: May 26, 2007 00:22 IST
Indulal PM
Indulal PM
Hindustan Times
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A few months ago, the Tatas made history with their mega buyout of steelmaker Corus. Now, it's made a huge pile selling its stake in US energy drinks maker Glaceau.

Tata Tea had bought a 30 per cent stake in Glaceau last August 2006 for $677 million. Now, it is selling that stake to beverage giant Coca-Cola for $1.2 billion (Rs 4,869.6 crore). In the process, India's largest tea-maker has made a cool cash profit of over $523 million (Rs 2,125 crore) in less than a year.

Coca-Cola on Thursday night approved the purchase of Glaceau, the maker of Vitaminwater, for $4.2 billion (Rs 16,800 crore) in cash and Coke stock.

"We have taken the decision to exit from the business as the parent company decided to sell it off to Coke," Tata Tea vice-chairman RK Krishnakumar said. "This shows that Indian corporates are quickly responding to market opportunities. This is very good for Tata Tea," says veteran investment banker Nimesh Kampani.

Tata Tea may use the surplus cash from the sale for potential acquisitions or refunding the debt of Tata Tea and Tetley. Tata Tea has a debt of over $666 million (Rs 2,707.63 crore), while Tetley's debt is at $600 million (Rs 2,434.8 crore).

The company will use the cash for future acquisitions especially in the US. Industry sources said that the Tatas may bid for domestic mineral water firm Himalaya.