HLL signs MoU with McLeod Russel for transfer of Doom Dooma Tea Company
13-12-2005 : Mumbai: Hindustan Lever Limited (HLL) and McLeod Russel India Limited (MRIL) today signed a Memorandum of Understanding for transfer of HLL’s 100% shareholding in Doom Dooma Tea Company Limited (DDTCL).
DDTCL owns 7 tea estates in Tinsukia district of Assam with a tea planted area of approximately 3100 hectares and 3 factories to process tea. The average output from these tea estates has been approximately 6000 metric tons. The tea gardens of DDTCL are in the quality belt of Assam and are in close proximity to the tea gardens of MRIL group.
The agreed consideration is Rs.69 crore plus net current assets as on December 31, 2005. The existing terms and conditions of services of all DDTCL employees will be fully protected in accordance with applicable laws and terms of their employment.
HLL management believes that the proposed transfer to MRIL, a lead industry player in tea plantations, is in the best interests of the business and all its stakeholders. The acquisition of DDTCL by MRIL will bring in more synergy benefits to MRIL and shall enable MRIL to realize better prices for their teas both in domestic and overseas markets. The transaction is expected to be completed in January 2006 post receipt of approval from shareholders of M/s Mcleod Russel India Limited.
It may be recalled that pursuant to a scheme of arrangement approved by the Hon’ble High Court of Judicature at Bombay vide their order dated 7th October 2005, HLL had transferred its tea plantation business in the State of Assam to Doom Dooma Tea Company Limited (DDTCL) with effect from 1st April 2005.
