Mumbai: Tata Tea, which has decided to exit its plantations business, has announced the formation of a new company - Amalgamated Plantations Ltd - to run its North India plantation operations, with an enterprise value of Rs360 crore.

Earlier Tata Tea had hived off its South Indian plantations as an employees'' cooperative, Kanan Devan Hills Plantations.

The new company, to be formed through a scheme of reconstruction, will be financed through a combination of equity and non-recourse debt. Tata Tea, International Finance Corporation (IFC) and IL&FS, will hold a 20-per cent stake each in Amalgamated Plantations.

A minority stake will be held by globally managed services and employees spread across its North Indian and West Bengal plantations.

Addressing a press conference in Mumbai, R K Krishna Kumar, vice chairman, Tata Tea Ltd, said the company will also initially engage in businesses like fisheries, floriculture, vegetables and spices before diversifying into other agriculture-related businesses.

"This will ensure that our tea operations achieve a new level of stable profitability," Krishna Kumar said, adding, "because of new streams of income (which will become available) in the medium-term," the company will get insulated from the cyclical fluctuations of the tea industry.

Kumar said that the company expected the necessary approvals from the West Bengal government, while those from the Assam government has been obtained to utilise 5 per cent of the company''s land there for non-tea operations.