Managing director R Deogun told The Financial Express that the company was about to finalise deals to buy hotels from at least two parties but, last-moment problems scuttled the deals. However, he said: "We are still in the process of talking to a few hotel chains currently."

Deogun declined to divulge the names of these hotel chains and said the deals may take some more time to fructify. "Keeping in mind the economics of the trade, the company will look into bigger occupancy hotels preferably the three to four star hotels," he said.

Leisure management and tourism is a prospective area and hotel business is one of the most synergistic areas with the company's tea business which is its main line of activity, the managing director said.

The group is keen to acquire hotels in south India, especially in places likeHyderabad and Bangalore, and smaller cities of business significance.In its main line of business, Rossell Tea is planning to buy gardens in Assam and Dooars to achieve greater production. Deogun said the company is yet to strike any deals. It is believed that the company was very close to buying some gardens but it finally backed out because of the price factor.The company would draw up an investment plan for the acquisition of tea gardens, once it is close to finalising deals. Rossell Tea has three gardens after the demerger with the YK Modi-controlled Rossell Industries four years ago.

The tea major is keen to increase its equity base with better market conditions. Last fiscal, the company made a preferential allotment of 15,00,000 equity shares of Rs 10 each at a premium of Rs 4 per share. The equity base increased from Rs 3.03 crore in 1996-97 to Rs 4.53 crore in 1997-98.

Production increased by over 8.12 per cent to 35.82 lakh kg and sales increased by 48.5 per cent to Rs 29.33 crore from Rs 19.75crore in 1996-97.The promoters have a 46 per stake in the company. Foreign holding is to the extent of 23 per cent and the rest is shared by financial institutions including UTI and the public.