Mcleod Russel to sell two tea estates for $12.6 mn
Photo Credit: Reuters

Kolkata-based tea plantation company Mcleod Russel India Ltd has signed initial pacts to sell two estates and related assets, adding to the dozen properties it agreed to divest in June.

Mcleod Russel said in a stock-exchange filing it will sell the Harchurah Tea Estate in the northeastern state of Assam to Goodricke Group Ltd for Rs 31.64 crore ($4.4 million) in cash.

It will also sell the Bargang Tea Estate in Assam to Amgoorie India Ltd for Rs 59.65 crore ($8.2 million) in cash. Amgoorie India is a subsidiary of Kolkata-based Goodricke Group Ltd.

UK-based Camellia Plc is the ultimate holding company of Amgoorie and Goodricke.

Goodricke said in a separate stock-exchange disclosure that the acquisition of the Harchurah Tea Estate will expand it volume of tea it makes in Assam. 

The transactions are subject to certain approvals and completion of due diligence by the two buyers, Mcleod Russel said.

In June, Mcleod Russel had signed initial pacts to sell eight tea estates to MK Shah Exports Ltd for Rs 331 crore and four estates to Luxmi Tea Company Pvt. Ltd for Rs 141 crore.

The company’s operations are divided under three divisions -- production in its own tea estates, production using tea leaves purchased from small growers, and teas produced by step-down overseas subsidiaries.

For the calendar year 2017, Mcleod Russel's production from the India business rose to 1,322 million kg from 1,268 million kg in 2016. It also benefitted from higher exports due to a decrease in Kenyan production and improvement in geopolitical atmosphere amongst consuming countries such as Russia, Egypt, Pakistan and countries in West Asia.

Goodricke, incorporated in 1977, is engaged in cultivation and production of tea. The company operates 17 tea gardens in West Bengal and Assam. Its packaged tea brands include Castleton, Barnesbeg, Thurbo and Khaass.

In October 2017, it had acquired the packaged tea business of Godfrey Phillips India Ltd for Rs 20 crore ($3 million).

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