McLeod Russel India’s UK subsidiary Borelli Tea Holdings Ltd has picked up a 75 per cent stake in US-based Olyana Holdings LLC for $2.75 million (about Rs 13 crore).
George W. Rubagumya, the promoter of Olyana Holdings, will hold the remaining 25 per cent stake, according to a shareholders’ agreement signed between the two parties.
Olyana had earlier signed a share sale agreement with the Rwanda government to acquire a 60 per cent stake in Gisovu Tea Company.
“Like our company, Gisovu Tea is engaged in growing and manufacturing tea and has a processing factory producing around 1.7 million kg annually,” Kamal Beheti, chief financial officer of McLeod Russel, said.
Olyana had acquired the controlling stake in Gisovu Tea to upgrade its gardens and improve its manufacturing and marketing activities.
Last month, McLeod Russel had said it was considering buying gardens with a capacity of 5-10 million kg in Kenya.
“We are looking to acquire gardens abroad. In the next three to five years, 25-30 per cent of our production should come from gardens based outside India,” managing director Aditya Khaitan had said.
McLeod Russel is the largest tea producer in the world. The company produces 80 million kg annually, of which 4.5 million kg comes from Vietnam, where it had acquired a garden last year.
A garden with an annual capacity of 5 million kg will cost around $10 million in Kenya, Khaitan had said.
During the first quarter ended June 2009, McLeod Russel had posted a 340 per cent rise in net profit at Rs 31.18 crore against Rs 7.08 crore a year ago.
Source: The Telegraph