Mcleod Russel India (MRIL), the biggest bulk tea producer in the world, will go for more acquisitions after strengthening its balance sheet.Aditya Khaitan, MD of MRIL, said the company wanted to retire the entire term loan component of Rs 300 crore within a span of two years through a combination of internal accruals and private placement of equity.Following private placement, the stake of the promoters would come down from the present level of 50% to 45%. After the retirement of the entire term loan, the company could again go for acquisitions.He was talking to reporters after the eighth annual general meeting of Mcleod Russel. It may be noted that the B M Khaitan group, the promoters of MRIL, had acquired Williamson Tea Assam and Doomdooma Tea last fiscal which made MRIL the biggest bulk tea producer in the world with control over 70 million kg of tea annually.According to Khaitan, MRIL would retire Rs 200 crore debt in 2006-07 through a combination of internal accruals and private placement of equity to qualified institutional buyers (QIBs).The company is planning to raise $ 30 million through private placement to QIBs. K K Baheti, CFO of MRIL, said the company would appoint a merchant banker for the issue within a fortnight."We might place it to financial institutions, foreign institutional investors or mutual funds as per Sebi regulations," he said. According to Baheti, the company would retire Rs 100 crore in 2007-08 through internal accruals."We shall continue with only Rs 176 crore debt as working capital out of Rs 476 crore debt the company currently has," he said.According to the CFO, the average cost of borrowing after the debt restructuring would be close to 8.5 per cent. Earlier, addressing the shareholders, Khaitan said that tea prices in the auction were going up and it is Rs 9 more than last year. "It is likely to go up further," he added.
