India’s largest bulk tea producer McLeod Russel India Ltd is sticking to its plans to restructure debt with the help of the bankers despite the unsolicited offers to take over the company and its assets.

The company’s chairman Aditya Khaitan informed the shareholders that banks have come to a ‘conclusion’ and they are awaiting approval from rating agencies before going ahead with the plan.

“The banks have been very supportive and have concluded in terms of what the debt restructuring resolution should be. It is now awaiting the clearances of the rating agencies.”

“I am sure that once we get that, the company will be ready to move on its debt restructuring programme and the banks will be fully supporting us,” Khaitan said at the 24th annual general meeting of McLeod Russel, which took place on the virtual platform.

According to an RBI circular which set the terms of the resolution process, the plan has to get a favourable credit rating indicating its viability.

Neither Khaitan nor the shareholders mentioned the offers of Carbon Resources Pvt Ltd to the banks or M.K. Shah Exports Ltd during the short proceedings.

Carbon Resources has proposed a comprehensive debt restructuring plan to take over the company and change the management.

M.K. Shah has offered to buy the gardens from McLeod to help realise the company’s restructuring plan and keep the existing management.

Khaitan expressed hope McLeod Russel will be stronger financially once it can act upon the restructuring plan, showing his resolve to go ahead with the company’s proposal.

Some of the shareholders exhorted Khaitan to raise promoters’ holdings in the company. Khaitan family holds just a 6.25 per cent stake of McLeod, making it vulnerable to takeover attempts as the one today. Khaitan did not respond to it at the AGM.

Operational direction

Khaitan said the company wants to focus on producing quality teas which fetch a premium in the market.

Moreover, it is aiming to produce more orthodox tea given the demand for Indian orthodox tea in the export market has gone up this year after Sri Lanka’s economic turmoil dented the island nation’s tea production.

“So the only way forward for the company is to go through the quality route for India, increase the orthodox production to take care of the vacuum that has been created due to Sri Lanka,” Khaitan told the shareholders.

He argued that depreciation of the rupee will help the company fetch more for exports.