MJF Group has announced a re-engineering exercise to consolidate all value-added tea export operations under a single entity – the listed Dilmah Ceylon Tea Company Plc.
The Board has resolved that the move will result in multiple benefits including opportunity to increase global reach and market share; significantly grow annual turnover, achieve economies of scale that will have a positive impact on cost base and operational efficiency via potential opportunities to streamline internal processes.
Accordingly, Dilmah Ceylon Tea Company Plc will acquire export business of MJF Teas Ltd., for Rs. 442.5 million thereby expand operations to cover all export territories.
The MJFT tea export business will be acquired for Rs. 442.5 million paid with a private placement 3.7% stake or 737,500 shares at Rs. 600 each. The valuation was after considering the audited financial statement, past performance and future forecasts of MJFT and the valuation report of the MJFT’s tea export business by independent consultants.
The stated capital of Dilmah Ceylon Tea Company is Rs. 200 million and MJFT holds 65.38% stake in it whilst the public holding is 12.81% held by 866 shareholders. Following the private placement MJFT will hold 66.61% stake. Related party MJF Exports holds 21.28% stake at present.
The private placement is subject to approval by the CSE, Board of Investment and shareholders.