Bulk tea producer McLeod Russel India, a part of the Williamson Magor group, is in talks with the bankers for restructuring its debt, a company official said on Monday. The company's short and long-term debt amounts to around Rs 1,700 crore.
"We are keen for a restructuring of debt for which discussions with the bankers are on. We are trying to give a proposal through SBI Caps for conversion of short-term loans into long term and also reduction of interest rates", McLeod Russel CMD Aditya Khaitan told reporters on the sidelines of the company's annual general meeting here.
Khaitan said the tea producer, which received around Rs 90 crore from the sale of two estates to Goodricke, has used the sum to repay a part of its debt. In his reply to the shareholders' queries on lending to another group firm McNally Bharat, Khaitan said, "In hindsight, it appears that it was a mistake. We wanted to see if that money could help turnaround of McNally Bharat. It has taken a toll on the company and the group." He clarified that there was no fresh lending to McNally Bharat after that.
Mcleod Russel had lent nearly Rs 1,800 crore to McNally Bharat. Khaitan said that the tea industry is going through a rough patch.
"Production in the organised sector is stagnant. Growth is only from the bought leaf factories (BLF) which are cluttering the market", he stated. According to him, the government needs to regulate the growth of the BLFs.
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