Calcutta, Aug. 3: Tata Global Beverages Ltd (TGBL) has undertaken a complex restructuring of its loss-making Russian business, selling the operations but retaining its right over the brands.

The company's overseas subsidiary, in which the EBRD (European Bank for Reconstruction and Development) holds a stake, signed an agreement with Skodnya Grand and Coffee Pack, Russia, whereby the new owner will take over all existing assets and operating liabilities, including employees, customers and supplier contracts.

The transaction, subject to the completion of certain conditions, including regulatory approvals, is expected to close over three to four months.

Following the closure of the deal, the new owners will continue to manufacture and sell TGBL's existing brands (Grand Coffee).

Simultaneously, the subsidiary entered into a five-year renewable licence agreement for all its Russian brands with Tea Trade LLC.

TGBL will earn a licence fee for the use of the brand.

Without disclosing the value of the deal, the company said its subsidiary will receive "a consideration for transferring the assets and operating liabilities and license fee for the use of the brand".

"Tata Global Beverages (TGBL) has undertaken a strategic review of its Russian business unit. As a result, the company is restructuring its presence in the Russian market to improve financial performance," a company spokesperson said.

The Russian business of TGBL generated a sales turnover of Rs 266 crore and a loss after tax of Rs 29 crore in 2016-17.

In a regulatory filing to bourses, TGBL said given the sustained challenges in the market place and the performance in recent years after currency devaluation (in Russia), a change in the operating model was warranted.

The TGBL stock closed at Rs 166.90 on the BSE, up Rs 1.95 or 1.18 per cent against Wednesday's close.