In a strategic move to bolster its financial standing and refocus on its core operations in India, McLeod Russel India Ltd, a leading bulk tea producer has announced the sale of its Vietnam-based subsidiary, Phu Ben Tea Company Ltd (PBTCL), for a sum of USD 2.15 million. The buyer in this transaction is TLK Agriculture Joint Stock Company (TLK).
The sale is set to be finalized by December 24, 2023, according to a regulatory filing by McLeod Russel India. This divestment is in line with the company’s recent efforts to alleviate its financial challenges by shedding non-core assets.
McLeod Russel India’s wholly-owned subsidiary, Borelli Tea Holdings Ltd, will facilitate this transaction by selling its entire capital contribution in PBTCL to TLK. In the last fiscal year, PBTCL made a substantial contribution of approximately USD 3.6 million to McLeod Russel India’s total revenue.
This strategic sale comes on the heels of McLeod Russel’s agreement in August to offload 15 tea estates in Assam to Carbon Resources, an electrode paste manufacturer, in a deal valued at around Rs 700 crore. This transaction is expected to significantly reduce the company’s debt burden.
At present headquartered in Kolkata, McLeod Russel India operates a total of 33 tea estates in India, with 31 located in Assam and two in West Bengal’s Dooars region. The divestiture of PBTCL is part of the company’s broader plan to streamline its operations and strengthen its position in the Indian tea industry.