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McLeod Russel has entered into an agreement with Jatinga Agro Tech Ltd to dispose of the Estates & Bearer Plants and other assets of Boroi Tea Estate in Assam.
Boroi Tea Estate had a turnover of a little over ₹23 crore in FY18 and contributed close to 1.48 per cent to the company’s total turnover. McLeod is likely to receive a consideration of around ₹28 crore from the sale of the estate.
“The company has decided to dispose of Estates & Bearer Plants and other assets of Boroi Tea Estate in Assam, subject to due diligence by the proposed buyer and necessary approval,” the company said in a notification to the stock exchanges.
McLeod has sold around 20 estates in India. Of these, sales proceeds from 12 estates have already come in and the proceeds from the remaining eight are expected by the end of this month.
Paring debt
The company had decided to prune some gardens to help lower its debt and also enhance investments in some of its existing gardens as well as channelise them towards the packet tea business, in which it currently has a small presence.
As on September 2018, its debt stood at around ₹1,500 crore. This is expected to come down to around ₹900 crore by March-end, said KK Baheti, Chief Financial Officer, McLeod.
At the end of last fiscal, the company had 52 tea estates in India, producing 67 million kg. Following the sale of the 20 estates, McLeod Russel’s own production capacity (the company also outsources to small growers) will come down to 42.85 million kg.
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