Financial Times

Hayleys gets ok in deal with Misty Mountain
By Duruthu Edirimuni
The Treasury and the Ministry of Plantations have given the greenlight to Hayleys Plantations Services to sub-lease three of its estates to Misty Mountain Holdings (MMH), a company with US interests, according to Tissa Gunatilleke, CEO, Hayleys Plantations Services.

MMH had been earlier unsuccessful in its efforts to buy other local tea firms. The Memorandum of Understanding (MoU) between Hayleys and MMH stipulates a down payment of around Rs. 42 million and an annual lease rental. The Treasury had to give approval for the agreement as the golden shareholder in the Hayleys plantations subsidiary.

Gunatilleke said the sub-lease would take place after MMH meets certain obligations stipulated in the contract. "We want to capitalise on the market network that MMH has established in the US and Canada," he added.

Despite being unable to seal deals to buy tea export firm HVA Lanka and John Keells subsidiary Namunukula Plantations Ltd (NPL), MMH has been working on sub leasing three estates of Talawakele Plantations owned by Hayleys. HVA said MMH had failed to pay up according to the initial agreement while MMH said it decided against the investment after its due diligence of the export firm.

MMH had also entered into a Sale and Purchase Agreement with JKH whereby the former conducted a due diligence of NPL and its holding company Keells Plantation Management Services (Pvt) Ltd (KPMS) with the intention of purchasing KPMS. However that deal failed as MMH was unable to satisfy conditions in the agreement.

MMH had agreed to a purchase consideration of Rs.400 million for 100 percent of KPMS subject to the due diligence of 65 days. KPMS has a 58.75 percent stake in NPL.

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