B M Khaitan group company McLeod Russel India Ltd. (MRIL) has marked its footprint in Africa, making its second overseas acquisition, the first being in Vietnam in October 2008.
The new acquisition in Rwanda will be through an American company, in which MRIL has taken a majority stake.
In an announcement made on Tuesday, the company said that its wholly-owned subsidiary Borelli Tea Holdings Ltd. has signed a share-purchase agreement with Olyana Holdings, an American limited liability company, for acquiring a 75-per cent equity at a price of $2.75 million.
Olyana, in turn, had earlier signed a share-purchase agreement with the Government of Rwanda for the acquisition of 60 per cent of Gisovu Tea Company which produces 1.7 million kg of tea annually.
Talking to The Hindu, MRIL Managing Director Aditya Khaitan said the company planned to invest around $5-6 million in the next three years and a team from MRIL would visit Rwanda next week to work out a business plan.
MRIL Director K. K. Baheti said the Olyana’s acquisition of controlling stake in Gisovu Tea Company was on a long-term basis with the objective of developing its plantation, manufacturing and marketing activities to make it globally competitive with the support of the Rwanda Government.
Olyana will implement the Gisovu Business Plan as envisaged in the share-sale agreement and will explore possibilities of processing and marketing of teas of Gisovu Tea Company by value-addition in collaboration with the Government of Rwanda.
In addition, Olyana shall negotiate with the Rwanda Government with a view to entering into a joint venture agreement to implement the projects that are set forth in the Karongi Tea Project Business and Investment Plan. This is separate from the Gisovu project.