MK Shah Exports, India’s largest producer of orthodox varieties of tea, has jumped into the race for debt-laden McLeod Russel India Ltd. The company has approached the lenders of McLeod with its ‘offer’ which appears to involve buying gardens from the Khaitan-managed company. “I have shown my interest and joined the race for bidding,” Himangshu Shah, chairman of MK Shah Exports, told The Telegraph on Friday.

Shah’s offer comes a week after Calcutta-based Carbon Resources Pvt Ltd (CRPL) stunned the tea industry with a proposal to take over McLeod Russel, offering a comprehensive plan to infuse equity and bring down debt.

In contrast, Shah appears to be interested in buying some of the gardens of McLeod, which in turn will help the company to pare its debt. “I want to take their plantations (gardens). I have taken some of their gardens in the past and they turned out to be good,” Shah said, adding that he fancies McLeod’s assets more than others.

“There are many offers from Darjeeling, South India or even Assam. But if we can get McLeod’s gardens, we are ready to acquire,” Shah confirmed.

Shah also distinguished his offer from the Jalans who have proposed to change the management and the board. “We don’t want to disturb the promoters. We have very good relations with them. There will not be any hostile action,” Shah explained.

Shah owns 13 gardens, accounting for about 18 million kg of tea. The turnover of the business, held through unlisted entities, was about Rs 400 crore in the last fiscal and it may touch Rs 500 crore in FY2023, he said. The majority of the gardens of the Mumbai-based company were bought from the Khaitans over the years. However, the majority of them were acquired during 2018 when McLeod Russel sold about 17-18 gardens to multiple people.

While CRPL has made a non-binding offer and has picked up a 5.03 per cent stake in McLeod from the market, the Khaitan family has been in talks with banks for a comprehensive restructuring of debt which is in the region of Rs 1,650 crore. One of the aspects of that restructuring package involves the sale of gardens to pare debt.

“In principle, we are interested in these properties, we want to buy. Banks are interested in resolving the case, they want money. If an amicable solution is found, it will be good for all,” Shah said. However, there is a Delhi high court judgment which prevents McLeod from selling or alienating assets.

Any garden sale has to overcome the legal hurdle which came up following an application from KKR.