McLeod Russel group to acquire Vietnam tea company for Rs32 crore
04 Oct 2008
Mumbai: Borelli Tea Holdings Ltd, the 100-per cent subsidiary of Mcleod Russel India Ltd (MRIL), has has signed an agreement with SIPEF NV of Belgium for acquisition of 100 per cent equity stake in Phu Ben Tea Company of Vietnam for a total of around $7 million (around Rs32 crore).
MRIL has signed an agreement with SA SIPEF NV of Belgium for acquisition of its equity stake in Phu Ben Tea Company of Vietnam at a cost of $2 million (Rs9 crore), the company informed the BSE in a fining on Friday.
In addition, Borelli will arrange a bank guarantee to secure repayment of inter-company balance of $5.01 million (rRs23 crore) granted by the Belgian company to Phu Ben Tea Company.
Phu Ben Tea Company will repay the inter-company balance within three years in equal installments at the end of 2009, 2010 and 2011.
Phu Ben Tea Company is engaged in growing, manufacturing and selling of Tea and produces around 4.5 million kg of tea annually in the three Tea processing factories owned by it.
MRIL plans to part-fund the acquisition through internal accruals and the deal is expected to be completed by the year-end.
The acquisition, the first by an Indian plantation company, is part of the Brij Mohan Khaitan Group's plan to consolidate their bulk tea business further through mergers and acquisitions.
Post acquisition, MRIL and its subsidiaries will collectively have an annual throughput of a staggering 80 million kg of tea.
