Darjeeling garden targets new investor for revival
The European investors of troubled Darjeeling Organic Tea Estates Pvt Ltd (DOTEPL) are making a lastditch attempt to bring the company back on track with the aid of a new investor.
The government can take any action if the attempt fails this time, the company pleaded.
In a letter sent to the district magistrate of Darjeeling on Saturday, DOTEPL chairman Rembert Biemond said the company was committed to clear the full backlog of wages and salaries over time ‘‘under a structured payment scheme’’ as it does not have the funds to do so at one shot.
The letter, reviewed by The Telegraph, underscored that the return of the workers and normalisation of the operation would be critical.
The communication followed the Friday meeting called by the DM who wanted the offer in writing.
Accordingly, the company reiterated to clear one fortnight of the backlog of the workers wages within three working days of reaching an agreement on this proposal with the workmen/unions under the aegis of the DM.
Additionally, the offer includes more elements that were previously known.
The company said the daily wages of the workers will be paid on a weekly basis based on recorded attendance from the date of return back to work.
However, the offer would be contingent on normalisation of operation, which forms the bedrock to arranging the interim finance, allowing the company breathing space to find a new investor.
Sources said the European investors, who own 97 per cent stake in DOTEPL, have approached a Singapore-based merchant banker to find a new suitor.
Biemond’s letter also stated that it does not have the funds to pay off the entire backlog in one go and proposed a structured payment scheme instead.
“This scheme is to be agreed with the workmen/ unions in the second half of the coming week in a meeting with worker unions, in your presence in Darjeeling, by an authorised representative of our company,” the letter noted. “If we are unable to meet our commitments as per above, the government may take whatever action as applicable under existing law,” Biemond wrote.
The letter depicted the state of affairs in DOTEPL which has turned non-performing assets in the books of banks and is facing trial for bankruptcy admission in the NCLT.
There are six European investors, led by Artava AG of Switzerland.
They checked in as a minority shareholder with a 12.5 per cent stake for Rs 120 crore, valuing DOTEPL at Rs 1,200 crore in 2015. Sanjay Prakash Bansal’s family and Duxton Group of Singapore were the two majority shareholders with 87 per cent shares.
When the financial health of the company went south after 2017, Duxton and Bansals were not willing to support more.
Eventually, the present set of European investors did, by way of equity as well as external commercial borrowing.
In total, they have brought in Rs 400 crore between January 2017 and July 2022, Biemond wrote. “Slowly we found out that while the gardens did not look that bad.... The governance of the company and especially its financial administration was pure chaos,” the letter stated, blaming Sanjay Bansal in particular, who has left the management.
However, the European investors are not willing to pull in fresh funds.
“While the leaks have stopped, to revive the gardens and to come to operational health more investment is needed. The European investors which I had brought on board were not willing to risk more money,” the letter read Biemond also noted that it found a prospective investor in March 2022 but the negotiation fell through after two months and the company lost crucial time.