KOLKATA: Tata Tea Ltd. (TTL) will give interest-free loan to its workers and staff for picking up stake in its proposed new entity in North India, through an open offer, TTL Managing Director, Percy Siganporia, said.

The ceiling has been fixed at Rs. 8,000 for workers and Rs. 20,000 for the staff.

Addressing a press meet here on Thursday, Mr. Siganporia said the loan would be repayable over seven years and there would be no adverse impact on the 31,800 employees at the North Indian gardens which are proposed to be spun off into a new company.

International Finance Corporation, Infrastructure Leasing and Financial Services and Global Management Services, a consultancy firm, and TTL were each likely to hold 20 per cent equity in the closely-held company which would be formed on or after April 1, 2007. He said others might also join in the equity at a later stage and the holding pattern would be clearer then.

Mr. Siganporia said the sale option for its North Indian options was not being considered as Tata Tea did not want to compromise on the welfare of the employees and protection of the environment.

Indications were that although TTL's registered office would remain in the city for some time handling the branded tea business, most of the operational activity would shift to Guwahati in Assam.

The total acreage in its 20 tea estates in Assam and two in Dooars in West Bengal is about 24091 hectares with about 30 million kgs of tea being produced annually.

He said that of the total acreage now with the company in Assam and West Bengal, about five per cent was proposed to be utilised for non-tea activities which might include agro or non-agro businesses such as tourism and pisciculture.

Mr. Siganporia indicated the possibility of "value-sharing with upcoming organised retail" but declined to give any details at this stage. There would also be organic marking for agro-products exported by the proposed new venture.

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