Jay Shree Tea close to raising Rs100 crore

Jay Shree Tea and Industries is in the final stages of talks with a clutch of overseas fund houses, mostly based out of Singapore and also with multilateral funding agency, International Finance Corporation, to raise equity of up to ¤100 crore to finance tea garden buy in Africa, managing director D P Maheswari told DNA.

The B K Birla Group company is hopeful of concluding the ongoing talks to acquire gardens in Africa within the next three months, he said.

“We are in active discussion with several overseas investors including IFC,” Maheswari said.

Jay Shree may raise between Rs50 crore and Rs100 crore from the investors. “We have recently received an approval for foreign direct investment into the company but the exact quantum of money to be raised depends upon the final discussion with them,” he said.

Foreign Investment Promotion Board has recently approved Jay Shree’s application for induction of foreign equity by way of issue of qualified institutional placement of up to Rs60 crore while its shareholders had earlier okayed a proposal to raise up to Rs100 crore and also increase the FII investment limit to 49% of its share capital.

Maheswari didn’t exactly specify when Jay Shree would raise the money, which is linked to its plan to buy tea gardens.

“The acquisitions could happen either in Uganda or Rwanda, countries where we would be comfortable working due to their congenial social environment. Though the talks are progressing a bit slowly, we expect to conclude the deals within the next three months,” Maheswari said.

The gardens being eyed by Jay Shree have a combined annual capacity of about 70 lakh kg. If the deals fructify, it would be Jay Shree’s second foray into Africa at a time when Indian planters are finding it difficult to raise capacity through domestic acquisitions as prices of tea estates have turned prohibitive.