Carbon Resources, which has recently submitted a plan to the lenders of debt-laden McLeod Russel in a bid to acquire a controlling stake in the stressed tea major, is pinning hope on its non-binding offer, a company official said on Sunday.
The carbon product manufacturer had picked up a 5.03 per cent stake in McLeod Russel in September and made the Rs 1,245-crore offer for the resolution of debt of the bulk tea producer.
"Bankers held a meeting with us on October 1, post our non-binding offer sent to them in September. They have asked for a detailed plan for which we have sought some data. However, bankers are yet to share that. We are waiting for their response and are hopeful about our plan," Carbon Resources finance head Mahendra Sharma told PTI.
He also said the company is optimistic after the meeting with the bankers, as lenders asked for a detailed "rehabilitation" proposal for 'ailing' McLeod Russel.
His comment came days after the BM Khaitan family, the existing promoters of McLeod Russel, said they were hopeful of retaining the management control of the company that produces 73 million kg of tea from a few dozens of gardens mostly in Assam and also in Africa and Vietnam.
The Khaitans expected that its ongoing restructuring plan lying with the bankers would be approved soon.
During the recently held annual general meeting of the tea company, McLeod Russel Chairman Aditya Khaitan informed shareholders that the banks have been extremely supportive, and they have reached a consensus regarding the appropriate debt-restructuring resolution.
They are currently awaiting the rating agencies' approval, he claimed.
The debt of McLeod Russel currently stands at around Rs 1,800 crore.
Khaitan also told shareholders that the company was focusing more on premium-quality tea to revitalise its finances. Carbon Resources is the second largest shareholder of the bulk tea major with a 5.03 per cent stake, while the Khaitans' holdings remain at 6.2 per cent.
The carbon product maker claimed that its offer is "more lucrative", and it wanted Rs 300 crore equity infusion. "The existing debt-restructuring plan by the Khaitans does not have any substantial cash infusion component, while our offer is solid and far more beneficial for the bankers in terms of recovery," the Carbon Resources official said.
To settle McLeod Russel's outstanding debt, the carbon product manufacturer offered upfront equity capital valued at Rs 300 crore, and a debt component of Rs 945 crore in the Rs 1,245-crore plan.
The Carbon Resources plan also offered to pay in full to the secured lenders of the tea company, while unsecured lenders would receive 55 per cent of their total dues.
The lenders of McLeod Russel 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 tea major MK Shah Exports Ltd stood by the Khaitans and offered support for their restructuring plan.
"We are there to help the current promoters (of McLeod Russel) and support their debt restructuring proposal which is in progress. We proposed purchasing their gardens because the move would assist them in stabilising the company's debt," an official of the MK Shah Exports said.
McLeod Russel, which reported a loss of Rs 38 crore in the first quarter of the current fiscal, had earlier sold its gardens to MK Shah to pare debt.
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