While Borelli picked up the stake in Olyana for $2.75 million, rest of the shares will be held by George W Rubagumya, former owner of Olyana. Borelli and Olyana signed a shareholders agreement on Monday.
Earlier, Olyana had signed a share sale agreement with the government of Rwanda for acquiring 60% shares in the government owned-Gisovu Tea Co. McLeod Russel officials will visit Rwanda next week to complete the acquisition process there.
Aditya Khaitan, managing director of McLeod Russel, said: The acquisition will help us in understanding Rwanda and African tea market. Moreover, the clients who buy black tea from us buy African crop too.
Borelli Tea Holdings had acquired Phu Ben Tea Co in Vietnam last fiscal for $2 million from Belgium-based SA SIPEF Company.
Olyanas acquisition of the controlling stake in Gisovu Tea Company is on a long-term basis and will stress on developing its plantation, manufacturing and marketing activities to make it globally competitive with the support from the government of Rwanda.
Rwanda produces high quality tea and Gisovu is one of the best properties in Rwanda as well as the world. Gisovu produces 1.7 mn tonnes tea now but we will scale it up to 4 mn tonnes soon, Khaitan said.
Olyana will also implement the Gisovu business plan and explore possibilities of processing and marketing teas of Gisovu Tea Company by value addition in collaboration with the government of Rwanda, the company said in a press statement.
Kamal Beheti, chief financial officer of McLeod Russel, said: We will look at the opportunities of expanding the plantation in Rwanda after the acquisition is complete.
Olyana will negotiate with the government of Rwanda for a possible joint venture to implement the projects in the Karongi Tea Project business and investment plan. That will include development of Gitesi (Karongi) tea factory and block industrial estates.