Banks may ‘come around’ and carry out the long awaited debt restructuring of bulk tea producer McLeod Russel India Ltd, shareholders were assured once again at the annual general meeting of the company.
McLeod Russel chairman Aditya Khaitan said the lenders have several options that they can work with.
“We are in the process of starting discussions on the restructuring plans. Hopefully the banks will come up with some clarifications and then we will be able to resolve these issues,” Khaitan added.
The assurance to shareholders comes at a time multiple banks (SBI, IndusInd, HDFC & Indian Bank) are pursuing to admit McLeod to bankruptcy, apart from Techno Electric & Engineering Ltd. There is a buzz that public sector backed National Asset Reconstruction Co Ltd (NARCL) has approached banks to buy out their loan exposure to McLeod at a discount.
Amid shareholders’ concerns about the future of the company, Khaitan pointed out that McLeod can chart out a ‘clear road map’ once it comes out of the present problem. “I think once the banks clear the resolution programme which could be of any options, we will then get together and focus on what is the need of the hour,” Khaitan said.
Speaking about the prospects of the tea industry for this fiscal, the chairman of India’s largest bulk tea producer said FY25 appeared to be a ‘better year’ than the last year, because of the shortage of crops in India due to extreme climate events throughout the growing season.
“There is a crop shortage and hence we believe that is going to reflect on the prices,” he said.
Moreover, the focus of the central government to curb use of chemicals during the tea growing process is going to help companies that are producing compliant teas, he added.
“We expect compliant teas will increasingly fetch better prices in the market and help growers like ours,” he argued.
While India is looking at a shortage, Africa, where McLeod has an estate in Uganda, is still reeling under pressure due to oversupply. He also sounded sceptical about export opportunities due to geopolitical uncertainties in West Asia.
