Hatton Plantations (HPL) is entering into a Partnership with Regency Teas, a milestone in the Company’s rapid and remarkable progress. In a share trade off completed this week, Regency Teas has made a strategic investment of LKR 290 M by acquiring close to 30 Million Hatton Plantations (HPL) shares from Lotus Renewables (LRE), representing 12.28% of HPL’s share capital, an announcement made to CSE stated.
Lotus Renewables is an energy sector leader in the country, with a diverse company portfolio including HPL. One of Sri Lanka’s largest tea producers, HPL generates close to 10 million kilograms of tea, with 14 estates and 11 factories. Its plantations span is in excess of 7,200 hectares of land, and its premium quality high grown teas are grown in estate elevations reaching 4,800 ft above sea level.
Upon completion of the transfer, Lotus would continue to hold the majority shareholding of 75.65%. The proceeds of the share sale will be used by Lotus primarily to expand its renewables and agricultural portfolio.
Hatton Plantations is expected to benefit from Regency Teas’ management expertise and vision, especially with its standing as a leading exporter of value added tea from Sri Lanka to over 25 countries worldwide. With a tea-bagging capacity of 3 million tea bags per day, its production plant is certified with all modern quality certificates including ISO 22000 and FSSC 22000. Regency’s products are also certified with Halal, Kosher and Organic labels.
Commenting on the sale announcement, Gary Seaton, Chairman of LRE and HPL said, “The combination of these two great companies — Regency and Lotus — within the folds of the HPL business ecosystem enables to scale, portfolio, selling and distribution capabilities to leverage competition in the race for excellence in the Sri Lankan tea industry. With a large portfolio of brands and being a leading tea export business, Regency has the ability to satisfy any tea connoisseur’s need. I am honored to be one of the leaders of this great expanded team — and excited that together we will challenge this industry in a new way.”
“Lotus’s acquisition of Hatton Plantations was one more in a series of potential major investments in Sri Lanka. It was a growth opportunity for Lotus, and was designed to extend operational capability, combining both Lotus’ and HPL’s strengths. G&G Singapore, the parent company of Lotus, has cast its net wide, with interests in strategically investing in varied sectors including renewable energy and sustainable agriculture. Lotus is continually on the lookout for more opportunities in Sri Lanka, to expand its renewables, agri-commodity trade and plantations,” K Gowri Shankar, Director G&G Singapore, Lotus and HPL said.
The Director and Chairman of the governance committees of HPL Mr Indrajith Fernando said: “This transaction is a positive response by domestic entrepreneurs, now with a robust investment pipeline, in a low interest rate regime and with a stable exchange rate. Lower reliance on foreign financing and the timely repayment of the country’s debt obligations, along with the reduced cost on domestic debt have also resulted in a favorable shift for example in the Colombo Stock Exchange”
This is despite rating agencies and doomsayers exaggerating the obvious and wishing for a downfall, he said.
Lotus Renewable Energy Group acquired Hatton Plantations (HPL) in a LKR 1.7 billion stock market deal, via a crossing on the Colombo Stock Exchange in 2019. Hatton Plantations — CSE listed — is a group company of Lotus, and Lotus is the Sri Lankan subsidiary of G&G Singapore.