McLeod Russel to sell off 12 Upper Assam gardens

GUWAHATI: In what is believed to be a big leap forward to rationalise production and reduce debts, McLeod Russel India Ltd (MRIL) has announced its decision to sell off as many as 12 tea estates in Upper Assam for Rs 472crore in two back-to-back deals over two days.

According to official documents, the Kolkata-headquartered company had on Tuesday agreed to sell off eight tea gardens in the Doom Dooma area of Tinsukia district to Mumbai-based MK Shah Exports Ltd for Rs 331crore, in one of the largest deals in the tea sector in recent years.

The eight gardens – Beesakopie, Daimukhia, Raidang, Samdang, Baghjan, Bordubi, Koomsong and Phillobari – had a combined turnover of Rs 192.76 crore during 2017-18, contributing 12.33% to the company’s total revenue.

The combined grant area of the eight plantations is 9,350 hectares and the area under tea is 5,700 hectares.

MK Shah Exports had in a press statement said the deal was expected to conclude soon, once the necessary approvals were in place.

“There is a high level of synergy between our existing properties and the properties we are acquiring in Doom Dooma. It presents us with the opportunity to rapidly scale-up our existing operations and maximise the potential of the acquired tea estates by implementing our know-how,” MKSEL executive Raj Berry said in the statement.

On Wednesday, McLeod Russel inked a memorandum of understanding with Kolkata-based Luxmi Tea Company Pvt Ltd to dispose of four gardens – Moran, Lepetkatta, Attabarie and Sepon – in the Moran area of Dibrugarh district for Rs 141crore. The gardens had contributed a turnover of Rs 88 crore to McLeod during 2017-18, contributing 5.6 per cent to the company’s total revenue.

McLeod Russel said the transaction would be subject to necessary approvals and due diligence by the proposed buyer.

Apart from repaying high-interest debts, the company said it plans to use the sale proceeds to buy back shares worth Rs 100 crore and diversify into the packet tea business.

Sources say the company is also looking for buyers for the Dooars gardens in Bengal.