Carbon Resources has exited McLeod Russel India Ltd after talks with the promoters of the bulk tea producer for a debt restructuring pact with banks fizzled out.

The Jalan family-owned Carbon completely offloaded a 5 per cent stake it held in McLeod for nearly a year in the open market and booked a loss of about Rs 4 crore.

The Jalans, however, maintained they continue to remain interested in India’s largest tea planter on a ‘clean slate basis’. “If McLeod goes to NCLT, we will make an offer,” Abhinav Jalan, director of Carbon Resources Pvt Ltd, told The Telegraph.

Explaining the turn of events, Jalan said the discussion with the Khaitans had resumed after McLeod came out of the corporate insolvency resolution process. However, they could not come to an agreement on Carbon’s contributions and the final offer to be made to banks for a one-time settlement, he added.

McLeod and Carbon entered into an exclusive pact in January this year to jointly work out an OTS offer to banks which have a combined debt exposure of over Rs 1,600 crore to the tea producer. The agreement came four months after Carbon scooped up a 5 per cent stake from the market and threatened to take over the company and made a non-binding offer to McLeod’s lenders.

After their takeover plan failed to make headway, Carbon was goaded to enter into talks with the Khaitans for the OTS proposal. However, McLeod was dragged to insolvency in February by IL&FS Infrastructure Debt Fund and the discussions were put on the back-burner.

In May, the Khaitans reached an out-of-court settlement with IL&FS and took McLeod out of CIRP, twice in as many years. Talks with Carbon resumed thereafter but not to Jalan’s satisfaction.

“They (promoters) wanted more money from us than what we had initially agreed upon but they were going to offer less to banks than initially envisaged. We believe the banks are not going to accept the offer and send the company to NCLT and our shareholding will just be worth papers. We thought it is best to exit to avoid a write down of our entire exposure,” Jalan said.

He insisted that Carbon, based in Calcutta, would make a compelling offer if bids are sought in CIRP. “We are ready to commit Rs 1,150 crore only to banks if we get it on a clean slate basis,” Jalan said.

Khaitan family sources countered the assumption that it has made a final offer to banks. “Talks with lenders are ongoing. We have not made any offer in writing,” they said. Asked to comment on the Carbon exit, they said they could tap other interested parties to arrange funds for the OTS deal.

The Suresh Jalan promoted company had offered Rs 750 crore to McLeod promoters as its contribution to OTS.

Carbon was expecting to pick up 15 gardens having a combined crop of about 18 million kg. McLeod has 33 gardens in India producing 42 million kg tea annually. Records with bourses show Carbon sold shares at Rs 22.18 while McLeod stock closed at Rs 22.30 on BSE, locked in the upper circuit of 10 per cent.