Bulk tea producer McLeod Russel India Ltd., has appointed SBI Capital Markets for preparing a debt recast proposal, which would involve restructuring of interest rates and conversion of short-term loans to long-term ones, chairman and managing director Aditya Khaitan said.
Earlier at the annual general meeting, he told shareholders that in hindsight, lending to group company McNally Bharat was a ‘mistake’. MRIL’s total debt stands at ₹1,700 crore. In recent times, the company has been forced to sell its assets to reduce debt.
A creditor has also moved the NCLT under the insolvency Code. “Our appeal is now pending before the NCLT and we hope to resolve matters,” he said.
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Talking to reporters after the meeting, he said that upon receipt of the SBI Caps report, the company would discuss with the banks to obtain their views. Shareholders raised questions about MRIL’s debts and wanted to know the promoters’ commitment levels and the management’s revival plans. Mr. Khaitan said that stagnant tea prices and oversupply conditions had worsened the company’s financials. He wanted the government to check the growth of the unorganised sector. Referring to loans to McNally Bharat Engineering, he said the promoters wanted to see if the firm, which was into execution of infrastructure projects, could be turned around as it was facing serious trouble.
“In hindsight, it was a mistake and now lending has been stopped totally,” he said. With gardens in West Bengal and Assam, MRIL was the single largest bulk tea producer in India. However, of late, its position has slid following the sale of a number of tea estates.