Date:07/09/2006 URL: http://www.thehindu.com/2006/09/07/stories/2006090703781800.htm

Business

Doom Dooma merger by year - end

Indrani Dutta

McLeod Russel plans to become debt-free

KOLKATA: McLeod Russel India Ltd (MRIL), the largest bulk tea producer, is planning to complete by 2006-07, the merger of Doom Dooma Tea which it acquired from Hindustan Lever in January 2006.

The Managing Director, Aditya Khaitan, told The Hindu that efforts were on to make the B. M. Khaian group company debt-free (on term debt account) by March 2007. Of MRIL's total debt of Rs. 480 crore, about Rs. 260 crore is on account of working capital requirements while the remaining is term debt. The company spent about Rs. 215 crore in 2005-06 for acquiring two plantation companies — William Tea Assam and Doom Dooma. He said Rs. 50 crore of the term debt had already been paid.

Mr. Khaitan said a quick turnaround had been possible at Doom Dooma and prices of its teas were averaging Rs. 85 a kg. As part of its debt reduction programme, MRIL raised Rs. 25 crore through private placement to a U.S.-based FII Capital International a month ago and was planning to raise another $30 millionor its rupee equivalent.

On the merger, he said the registered office of Doom Dooma would be shifted from Mumbai to Kolkata and after that the merger would be effected through the permission of the Calcutta High Court and the shareholders.