McLeod Russel to sell majority of its tea biz at Rs 700 crore

Guwahati: McLeod Russel India Limited, a prominent player in the tea industry in Assam, has announced to sell certain identified tea estates to Carbon Resources Private Limited at an estimated sum of Rs 700 crore as part of a debt resolution process. 
However, the company has not named the identified tea estates which are up for sale. 

MecLeod now has 33 gardens, of which 31 are in Assam and two are in Dooars region in Siliguri.

The move comes in accordance with the Reserve Bank of India's Prudential Framework for Resolution of Stressed Assets dated June 7, 2019.
In an adjourned board meeting held on August 4th, 2023 the copy of which is available with Business North East, the directors of McLeod Russel India Limited discussed and approved the execution of a binding Term Sheet with Carbon Resources Private Limited. 
This Term Sheet outlines the terms for the sale of these tea estates, marking a significant step in the debt resolution process.
The proposed transaction is aimed at achieving a one-time settlement of the debt owed by McLeod Russel India Limited to its identified lenders. The Term Sheet expresses the mutual commitment of the involved parties and establishes a legally binding obligation to proceed with the transaction.
The successful completion of this transaction is subject to the finalization of definitive agreements, fulfillment of conditions precedent as stipulated in the Term Sheet, and the receipt of necessary permissions and consents. Notably, this includes the consent of the shareholders and approval from the identified lenders of McLeod Rusel India Limited.

Notably, the operational turnover of the Company was a bit marginally lower at Rs. 110853 lakhs against Rs. 111187 lakhs in the previous year. 
The Company made a post-tax loss of Rs.13617 lakhs in the year under review as against a loss of Rs. 5283 lakhs in the previous year due to steep rise in costs of various inputs without a proportionate rise in sale price. 
During the year the Company was not able to meet terms of facilities/loans availed from various Lenders, the company said in its annual report. 
The company's decision to enter into this strategic transaction underscores its dedication to resolving financial challenges and optimizing its operations.