FIPB clears 74% FDI in plantation

FIPB clears 74% FDI in plantation
ENS ECONOMIC BUREAU

NEW DELHI, FEBRUARY 8: The core group of the Foreign Investment Promotion Board (FIPB) on Tuesday cleared foreign direct investment of upto 74 per cent in the plantation companies including tea and coffee.

The FIPB is expected to formally clear the proposal at its meeting next week after which it would forwarded to commerce and industry minister Murasoli Maran for his approval.

The core group decision would pave the way for Unilever to acquire a 74 per cent stake in Calcutta-based Rossell Industries. The Unilever proposal had been deferred by the FIPB last month when commerce ministry pointed out that foreign investment was not allowed in the plantation sector.

Sources said that both the industry and commerce ministries supported the proposal to permit majority foreign investment in the sector.

Industry sources said that other foreign majors are also likely to follow suit and acquire tea and coffee plantation companies in India.

Unilever is acquiring the stake in Rossell through its Dutch subsidiaryUnilever Overseas Holdings BV for Rs 129.50 crore. Rossell, jointly promoted by Jokai Tea Holdings of UK and YK Modi group, has seven tea garden in Assam. Jokai holds over 36 per cent stake in the company while Modis have about 29 per cent holding.

Unilever's Indian subsidiary Hindustan Lever Ltd will acquire some stake from the Indian shareholders through a public offer.