As a result, Tetley will eventually cease to be a wholly owned subsidiary of Tata Tea, with Tata Sons holding 20 per cent and Tata Tea the balance 80 per cent.

At an analysts meeting today, Homi Khushrokhan, the new managing director of Tata Tea said, "The Tata group has invested POUND30 million in the Tetley group to improve operations. The infusion of funds is made to further strengthen our commitment and to retire very high cost debt," Kushrokhan added. Out of the POUND 30 million infusion, POUND 26 million is for retiring high cost debt.

Anil P Goyal, vice-president (finance), Tata Tea, said, "The infusion of the POUND30 million is to replace the quasi equity with equity and not replacing debt in traditional form."

Of the POUND30 million, Tata Sons will invest POUND20 million, while the balance will be invested by Tata Tea. With this infusion of funds, the equity capital of the company will increase from POUND70 million to POUND100 million, Khushrokhan said.

The equity investment was made into Tata Tea (Great Britain), a special purpose vehicle created for the Tetley acquisition.

Tata Tea has acquired the Tetley group at a cost of POUND271 million. The acquisition was financed with POUND70 million of equity, of which POUND60 million was brought in by Tata Tea and POUND10 million by Tata Tea Inc, USA, a 100 per cent subsidiary of Tata Tea.