Oldest tea company to go under hammer
Guwahati: Assam Company India Limited, the first tea company to be set up in the world, is going under the hammer.
The Guwahati bench of the National Company Law Tribunal (NCLT) had initiated corporate resolution proceedings against the company in October 2017 after it turned insolvent due to losses in its oil business. On Wednesday, the NCLT called for expression of interest for resolution plan. The company had promoted an oil and gas company in Gujarat which had made losses and was a guarantor.
The Assam Company, which was set up in 1839 by a deed of the British Parliament, has 14 gardens in Assam. The company became Assam Company India Limited in 1977.
All powers are now vested with resolution professional Tiruvengadam Kannan, who is an independent person appointed by the NCLT.
The expression of interest issued by the resolution professional says any private or public limited company interested in the bid should have a minimum tangible net worth of Rs 400 crore and above and a minimum surplus fund of Rs 50 crore in cash as on March 31. In case of a mutual fund/non-banking financial company or similar entity, it should have had assets of Rs 4,000 crore in the past three years and committed funds of Rs 2,000 crore as on March 31.
All those wishing to participate in the bidding will have to deposit a non-refundable process participation fees of Rs 10 lakh plus applicable taxes and will have to pay Rs 5 crore for buying information memorandum which will have details of the company, including balance sheets of the last 10 years. It will also have to inform on its experience in the relevant sector.
The last date for submission of expression of interest is April 26.
A source said several companies are interested as these are prized gardens known for their quality world over. "The real picture will emerge once the companies have submitted their details and how many applications are deemed eligible once it is evaluated by the resolution professional," a source said.
"This development does not show the tea industry in a positive light. It sends out signals that the industry is not doing well due to various reasons and a serious introspection is needed. There is no point in playing a blame game," a tea planter said.
"One needs to find out what has gone wrong. The companies also need to pull up their socks, do their homework and adapt to the new situations. Today, it has happened to someone, tomorrow it can happen to anybody," he added.
The industry says the cost of production has been rising fast while prices remain subdued and unsupportive to the producers and unless the prices being realised by the tea producers improve and provide adequate margin to cover costs and investments, it will be extremely difficult for the industry to remain sustainable.