McLeod Russel is having a roller coaster ride today. It opened at the day’s high point at Rs.162.90, up almost 3%. But after that, it has come down consistently and is now trading in the red at Rs.157.

The market reacted right initially on news of signing an MoU for sale of two tea estates but soon the overall despondent moods of the market took over.

The company has signed an MoU with Amgoorie India and Goodricke Group for disposal of tea estates in Assam.

The company will be selling its estates, bearer plants and other assets of Bargang tea estate to Amgoorie India at a cost of Rs.60 crore.

Goodricke will be buying the Harchurah tea estate at a cost of Rs.32 crore.

Taken together, these gardens contribute around Rs.59 crore or 3.73% of McLeod’s annual turnover.

The company is on a drive to trim its tea estates portfolio to pare its debt, fund a share buyback and raise capital to fund its recent decision to foray into packet tea segment. The company had targeted to raise Rs.500 crore from the sale proceeds of tea estates and has now upped the target to Rs.800 crore.

This Willamson Magor Group has so far completed agreements to sell 14 estates in Assam, exceeding Rs.560 crore in current fiscal.