Jay Shree Tea & Industries Ltd, a BK Birla group firm, is disposing of two of the tea estates that it bought in Africa nearly a decade back.
The company is selling Mata Tea Co. Ltd and Gisakura Tea Co. Ltd in Rwanda to Belgium-based Grand Lacs Trading SA for $10 million (Rs 71 crore), said a stock market disclosure.
Grand Lacs deals in the wholesale business of computers, computer peripheral equipment and software.
Kolkata-based Jay Shree had acquired those two assets and another tea estate namely Kijura Tea Co. Ltd in Uganda in 2010.
The said assets are said to have contributed nearly Rs 26 crore or 9.77% to the overall revenue of Jay Shree during financial year 2018-19.
The company had said in a stock-exchange filing last week that it has decided to monetise certain tea estates and other assets in India or abroad. “The directors are of the view that it may be prudent for the company to dispose of one or more of its estate (s) in India and overseas and/or other assets which have varying contributions. The proceeds from the sale will be used to consolidate and strengthen the firm’s financial position including containment and optimisation of liabilities, including borrowings,” the filing said.
Jay Shree, controlled by Jayashree Mohta, elder daughter of late BK Birla, produces black tea, green tea and speciality tea. In India, the company has gardens in Darjeeling, Assam, the Dooars (alluvial floodplains in northeast) and Tamil Nadu.
The company had posted consolidated net sales of Rs 756 crore during 2018-19 – almost the same as Rs 757 crore a year before. The firm swung to a loss last financial year after clocking a net profit of Rs 34 crore for 2017-18.
Jay Shree competes with tea plantation company McLeod Russel, which has also been selling its tea estates for the past year in order to trim debt.
In April 2019, Kolkata-based McLeod, which also has a presence in Uganda, Vietnam and Rwanda, said it would sell three more tea estates.
The company said in April 2019 it would sell its remaining 45% stake in Rwandan firm Pfunda Tea Company Ltd to Scotland-registered Rwanda Tea Investments Ltd for Rs 54.6 crore ($7.88 million).