Continuing its overseas expansion strategy rolling, Kolkata based tea plantation major Mcleod Russel India Ltd (MRIL), has entered into an agreement with Olyana Holding for acquiring 75% equity. Mcleod has signed a share-purchase agreement through its wholly owned subsidiary Borelli Tea Holdings Ltd with Olyana Holdings to acquire the stake for $2.75 million. With this acquisition, Mcleod Russel will indirectly hold a 42% stake in Rawandan farm Gisovu Tea Company. Olyana, an American limited liability company, picked up a 60% in Gisovu for $2.4 million from Government of Rwanda.
This is the second overseas acquisition of Mcleod Russel, part of the BM Khaitan group. The earlier acquisition was Vietnam based Phu Ben Tea Co Ltd in October 2008.
The move is part of company’s plan to take over Gisovu Tea Company in Rwanda. Gisovu has a tea processing factory in Rwanda and with a capacity of producing around 1.7 million killograms of tea annually.
K K Baheti, Director, MRIL said in a communique to stock exchange that the Olyana’s acquisition of controlling stake in Gisovu Tea Company was on a long-term basis with the objective of developing its plantation, manufacturing and marketing activities to make it globally competitive with the support of the Rwanda Government.
He further stated that Olyana will implement the Gisovu business plan as envisaged in the share-sale agreement and will explore possibilities of processing and marketing of teas of Gisovu Tea Company by value-addition in collaboration with the Government of Rwanda.
Mcleod Russel currently produces over 80 million kilograms of tea from its four tea estates in Assam, West Bengal and Vietnam. It has presence in Europe, Middle East and North American market.
The net sales of the company stood at Rs 120.8 crore during the quarter ended in June 30, 2009, up from Rs 98.24 crore from its corresponding figure last year. The net profit of the company stood at Rs 31.18 crore in the same quarter, up from Rs 7.08 crore from the corresponding figure last year.