Moran Tea To Merge Arm With Itself

Moran Tea Company (India) Ltd, a 76 per cent subsidiary of UK-based Moran Holdings is planning to merge its subsidiary, Trans Global Enterprises, with the company.

Confirming the development, Moran Tea managing director NF Tankariwala, said the merger proposal, which was aimed at reducing cost and paperwork, would be ratified at the company's board meeting on September 19.

Moran Tea, which has four tea gardens in Assam, produces nearly 4 million kg of tea. In view of the dull tea market scenario, it has put its plans of garden acquisition and establishment of bought leaf factory on hold.

Equity shares of Trans Global will be extinguished following the merger as it is a wholly-owned subsidiary of Moran Tea while its assets and liabilities will be absorbed by the merged entity. Trans Global has an authorised share capital of Rs 20 crore and paid-up equity capital of Rs 10 crore. It has long term investment in two Williamson Magor engineering companies. The depressed condition prevailing in the capital markets has reduced the value of the investment Trans Global made in equity shares.

The recoverability of Moran Tea's investments in Trans Global becomes uncertain once the proposal is passed. The statutory auditors of Moran Tea-Lovelock & Lewis, commented in the annual report for 2000-01 that they were unable to comment "on the recoverability and the resultant provisioning to the extent necessary, if any, required in investments in Trans Global Enterprise amounting to Rs 7.72 crore and loans and receivable from it totaling to Rs 31 crore."

Moran exports around 25 per cent of its crop to UK and Germany. Exports have increased around 22 per cent from last year but the prices were affected by the lower exchange rate of the Indian rupee against pound sterling.