We are looking at a better year, says McLeod Russel CMD Aditya Khaitan

Amid a clutch of insolvency petitions, Aditya Khaitan, chairman and managing director, McLeod Russel India, expressed hope that the banks will come around and there will be resolution to the debt issue.

At the company’s annual general meeting (AGM) on Monday, Khaitan gave an overview of operations and the future roadmap for the company.

Khaitan told shareholders that he was in constant touch with the banks. “Hopefully, the banks are coming around and we will be able to resolve these issues. Then the company can chart a clear roadmap for the future in order to come out from its present problems.”

“Once the banks clear the resolution programme, which could be any of the options, we will then get together and focus on what is the need of the hour,” he added.

McLeod Russel had been in debt restructuring talks with banks for a while now. However, some of the lenders and other creditors have filed insolvency petitions against the company, whose principal debt is about ~1,800 crore.

The annual report for FY24 mentioned applications filed by State Bank of India, Shah Brothers, PDK Impex Pvt Ltd and IndusInd Bank before National Company Law Tribunal (NCLT), Kolkata, for initiating corporate insolvency resolution process (CIRP), were pending and being contested by the company. Subsequent to the closure of the financial year (FY24), applications for initiating CIRP were also filed by HDFC Bank and Indian Bank, which are being contested by the company.

While disclosing the financial performance for Q1FY25, the company had said that lender banks as confirmed by the management were evaluating resolution proposals involving debt repayable to them including assignment thereof and necessary communication conveying their decision on the matter was awaited.

At the AGM, Khaitan said that McLeod was looking ahead at a better year (FY25). “There is a crop shortage and hence we believe that is going to reflect in the prices. The first quarter results were encouraging. And hopefully, it will continue through the year,” he told shareholders.

Khaitan also pointed out that the government banned a lot of chemicals. “That will level the playing field between the organised and unorganised sector. It will really be the light at the end of the corner for compliant teas and their premium will go up.”

The main problem, he mentioned, was oversupply, which had reflected on prices last year.

On the overseas side, he said, Uganda was still suffering. “There is an oversupply of tea in Africa. Exports are also limited because of the oversupply situation in Africa. Also, there were geopolitical issues – especially Pakistan, Iran, Syria, Lebanon either due to sanctions or financial position. As a result, tea is not being regularly purchased in the manner that it should,” he said, adding that hopefully things will settle down in the coming months.