The acquisition is likely to be completed in the current fiscal. It is believed that the remaining 26 per cent would be offered at a later stage.
The Rs 22-crore Empire Plantations would later be amalgamated with the Surendra Paul faction of the Apeejay group, sources said.
Empire Plantations, which has four tea estates in Assam, has a share capital of Rs 60 lakh. AFT, with a production of nearly 15 million kg, would add an additional 4 million kgs with the acquisition.
AFT, at a later stage, also plans to acquire Singlo Plantations, another tea company belonging to Swraj Paul. But this would only come about once the acquisition of Empire Plantations is complete. Singlo also has four tea gardens in Assam.
The permission for the move has already been granted by the Reserve Bank of India (RBI) and the Company Law Board. The company has recently finalised export contracts to Iran. Its total consignment to the Iranian market is about 6.5 lakh kg, including both bulk and packet tea.
The company has shelved its earlier plan of a GDR issue. The cost of dilution would be quite high as there would be no premium on a GDR issue, industry sources said. Moreover, no tea company has yet gone in for a GDR issue. The company had contemplated this earlier when share prices of AFT had been ruling at Rs 900. It has now come down to Rs 150-Rs 200.
