 "tea producer McLeod Russel")
McLeod Russel India has submitted a fresh plan for debt resolution to lenders, the company said on Tuesday while announcing its results.
It had earlier offered a one-time payment (OTS) of Rs 1,030 crore to lenders in settling the entire outstanding against the loans including interest.
It also had a pact with electrode paste maker Carbon Resources for selling some tea gardens to facilitate the payment.
However, the validity period of the OTS offer expired on September 30, 2023, in the absence of a consensus among lenders. McLeod’s principal debt with the banks is Rs 1,700 crore.
McLeod said in its regulatory filing on the request of the lenders it had submitted a fresh resolution plan currently under the lenders’ consideration.
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Sources said a draft resolution plan had been submitted towards the end of January. Instead of an OTS, it entailed restructuring its debt and a staggered sale of assets in the wake of weak market conditions.
The tea industry has been affected by lower prices and higher wages, which reflected on McLeod’s performance.
The bulk tea producer reported a net loss of Rs 81.68 crore on a consolidated basis in the October-December quarter (Q3FY24) compared to a net loss of Rs 70.79 crore in the year-ago period. Revenue from operations stood at Rs 348.62 crore in Q3FY24, down by 28.64 per cent compared to Rs 488.59 crore in the year-ago period.
The results filing said the management was confident of arriving at a suitable resolution as acceptable to the lenders.
With the support of lenders in restructuring/settling debt and the resultant rationalisation of the cost of borrowing and efforts at rationalising operational costs also, the company hopes to generate a sufficient cash flow to meet its obligations and strengthen its financial position over a period of time.
