Misty Mountains Holdings bid to buy into the Lankan tea sector fell apart with John Keells Holdings and HVA Lanka calling off their deals with the US firm.
John Keells said on Monday it called off its sale and share purchase agreement as Misty Mountain had failed to satisfy pre-sale conditions.
The deal, which was struck on March 22, allowed Misty Mountains to conduct a due diligence study on Namunukula Plantations Ltd and its holding company Keells Plantation Management Services (Pvt) Ltd.
Misty Mountains had agreed to buy a 100 percent stake in Keells Plantations for Rs. 400 million. Keells Plantations controls 58.75 percent of Namunukula.
Meanwhile, negotiations to take a 60% stake in HVA also fell through when Misty Mountains failed to meet its first payment.
Many attempts to renegotiate the deal and buy time failed, with Misty Mountains negotiating team asking for more time to meet the payment obligations.
Misty Mountains interest in the local plantation sector stems from a strategy to build up a lquote tea bush to customer chain, as it tries to break into the global tea market.
Industry sources earlier claimed that Misty Mountains was considering investments of up to Rs. 2 bn in the local market in this pursuit.
“We want to develop the Misty Mountain brand which is a high premium, high quality speciality brand”, Chairman of Misty Mountains Holdings, Alan Lipscomb told LBO in an earlier intervies.
“We are initially targeting the US and Canada which is a market growing at 17 to 20 percent”.
The company has been on an acquisition spree in the country to build up a lquote tea bush to customer chain, as it tries to break into the global tea market.
-LBO Newsdesk: [email protected]