The proposed sale is subject to necessary approvals and due diligence by the proposed buyer, Kolkata-based Luxmi Tea Company.
After signing a deal to dispose of eight tea estates in Assam, world’s largest tea producer McLeod Russel is also planning to sell four more estates in the same state to a different company for a consideration of Rs 141 crore. The tea major informed the stock exchanges that it executed a memorandum of understanding (MoU) on Wednesday for the proposed disposal of four tea estates — namely Moran Tea Estate, Lepetkatta Tea Estate, Attabarrie Tea Estate and Sepon Tea Estate.
The proposed sale is subject to necessary approvals and due diligence by the proposed buyer, Kolkata-based Luxmi Tea Company. The Williamson Magor group-controlled tea major on Tuesday entered into an MoU with another city-based company, M K Shah Exports, for its proposed sale of as many as eight tea estates for a consideration of Rs 331 crore.
McLeod Russel said in the last fiscal these eight estates in registered a revenue of Rs 192.76 crore, which was over 12% of the company’s turnover. During the same period, the four estates, identified for selling to Luxmi Tea Company, generated a revenue of Rs 88 crore.
Notably, the company has proposed to utilise the sale proceeds in repayment of high interest bearing debts, buying back its own shares from the shareholders to the tune of Rs 100 crore, and making investment for diversification into packet tea business.
For developing packet tea business, it has already agreed in principle to join hands with Eveready Industries through a third entity. Williamson Magor group’s Eveready Industries is the industry leader in the portable energy (dry battery and flashlight) segment in India.