The Hindu : Business : Harrisons to sell rubber estate

Online edition of India's National Newspaper
Thursday, Jun 16, 2005

Business

Business

Harrisons to sell rubber estate

Special Correspondent

Proceeds to be utilised for retiring debt; more deals likely

KOLKATA: Harrisons Malayalam Ltd. (HML), belonging to the RPG group, has decided to sell one of its largest rubber estates. The company board met here on Wednesday and passed a resolution authorising the sale of the Cheruvally rubber estate in Erumeli in Kottayam district, Kerala, to A. V. George & Co., a natural rubber grower in Kerala.

The estate, spread over 2,263 acres and employing 445 people, will be sold along with its employees as a functioning entity, according to an official spokesman of the RPG group.

Company sources said the sale consideration was Rs. 63 crore, and it was likely to be utilised to retire a part of the Rs. 100-crore debt of HML which had 11 tea estates and an equal number of rubber estates (including the one up for sale).

HML's plantations, spread out over Tamil Nadu and Kerala, produced around 15,000 tonnes of tea and 9,000 tonnes of natural rubber annually.

The sale is subject to the approval of shareholders. The company, which has a turnover of over Rs. 120 crore, was making losses until recently and the current sale is seen as part of the RPG group's plan to turnaround its plantation outfit. The sources said the RPG group was in talks for selling one more rubber estate and negotiations had already begun. The gameplan was to retire the entire debt of HML.

When contacted, the RPG Enterprises Vice-Chairman, Sanjiv Goenka, said the company had been turned around and the bottom-line was set to improve. "The sell-offs are part of our strategy to improve the financial health of the group companies,'' he said. A year ago another rubber estates under HML, Boyce, was sold for Rs. 33 crore, he said.

However, he ruled out any divestment of the HML tea estates for now, although there had been a recent trend in this direction with Hindustan Lever and the Tatas selling off some of their gardens. Company sources were hopeful of HML returning to the dividend list soon, after a gap of about five years.

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