March 26, 2003 | The Financial Express
Tata Tea (GB) announces Rs 30 crore maiden dividend
Tata Tea (GB) Ltd, the 100 per cent owner of the Tetley Group Ltd UK, has approved a maiden interim dividend of £4 million for the year 2002-03. The amount translates into approximately Rs 30 crore of which Rs 25.35 crore will be received by Tata Tea Ltd, Rs 4.20 crore by Tata Tea Inc, the US-based arm of Tata Tea and Rs 45 lakh by Tata Sons Ltd. As per a company press release, the dividend will be received and accounted by the three companies with in March 2003.
Tata Tea vice president (finance) Anil Goel said, "The first dividend has come sooner than any one had expected." According to Mr Goel, the maiden dividend by Tata Tea (GB) will demonstrate to the minority shareholders who hold around 70 per cent of Tata Tea’s shares that the investment in Tetley has delivered the expected returns.
"We knew that the investment in Tetley will deliver good returns but there was some skepticism about how much time it would take to deliver," said Mr Goel.
Mr Goel informed that the dividend will be taxed in India as per the prevailing law. He said that the cash will be utilised by Tata Tea in an appropriate manner.
The Tetley Group Ltd was acquired by Tata Tea in a buy-out in March 2000. Tata Tea then had a debt equity ratio of 3:1. Post acquisition over the last three years, several measures were initiated successfully to further improve Tetley’s world wide operations. Tata Tea had earlier this month also announced the completion of the refinancing of original debt raised at the time of acquisition by Tata Tea (GB) Ltd, which has now been replaced by a fresh cost effective new debt at significantly lower interest cost and operating head room.