Carbon Resources raises hopes of debt plan for stressed McLeod Russel

Carbon Resources, which recently submitted a plan to debt-ridden McLeod Russel’s lenders to acquire a majority stake in the ailing big tea company, is pinning its hopes on its non-binding offer, a senior executive said on Sunday. the society.

The carbon products maker had acquired a 5.03% stake in McLeod Russel in September and made an offer of Rs 1,245 crore for the loose tea producer’s debt resolution.

“The bankers held a meeting with us on October 1, publish our non-binding offer which was sent to them in September. They have requested a detailed plan for which we have requested data. However, the bankers have not yet shared We are waiting for their response and we are hopeful about our plan,” Mahendra Sharma, CFO of Carbon Resources, told PTI.

He also said the company was optimistic after the meeting with bankers, with lenders asking for a detailed “rehabilitation” proposal for “ill” McLeod Russel.

His comment came days after the BM Khaitan family, current promoters of McLeod Russel, said they hoped to retain management control of the company which produces 73 million kg of tea from a few dozen gardens mainly in Assam and also in Africa and Vietnam.

The Khaitans expected his ongoing restructuring plan in the hands of the bankers to be approved soon.

At the tea company’s recent annual general meeting, McLeod Russel Chairman Aditya Khaitan informed shareholders that the banks have been extremely supportive and have reached consensus on the appropriate resolution to restructure the company. debt.

They are currently awaiting approval from rating agencies, he said.

McLeod Russel’s debt currently stands at around Rs 1,800 crore.

Khaitan also told shareholders that the company is focusing more on premium tea to revitalize its finances. Carbon Resources is the second largest shareholder in the bulk tea major with a 5.03% stake, while the Khaitans’ stakes remain at 6.2%.

The carbon products maker claimed its offer was “more lucrative” and that it wanted an equity injection of Rs 300 crore. “The Khaitans’ existing debt restructuring plan has no substantial cash injection component, while our offer is strong and far more beneficial to bankers in terms of recovery,” the Carbon Resources official said.

To settle McLeod Russel’s outstanding debt, the carbon products maker has offered initial equity valued at Rs 300 crore and a debt component of Rs 945 crore in the plan of Rs 1,245 crore.

The Carbon Resources plan also proposed to pay the tea company’s secured lenders in full, while unsecured lenders would receive 55% of their total dues.

McLeod Russel’s lenders include ICICI Bank, State Bank of India, Indian Bank, RBL Bank, Axis Bank, HDFC Bank, UCO Bank, Punjab National Bank, Yes Bank and IndusInd Bank.

Notably, another major tea company, MK Shah Exports Ltd, stood with the Khaitans and offered support for their restructuring plan.

“We are here to help the current developers (of McLeod Russel) and support their debt restructuring proposal which is underway. We have offered to buy their gardens as it would help stabilize the company’s debt,” said an official from MK Shah Exports. said.

McLeod Russel, who reported a loss of Rs 38 crore in the first quarter of the current financial year, had earlier sold his gardens to MK Shah to reduce his debt.

(Only the title and image of this report may have been edited by Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

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