Lenders to the financially troubled McLeod Russel have initiated a re-validation of the valuation of the tea major for the purpose of a one-time settlement (OTS) of its debt after the validity period of the earlier proposal expired due to the absence of consensus among certain lenders.

McLeod, India’s largest bulk tea producer, had earlier made an OTS proposal to the lenders to make a payment of ₹1,030 crore in settlement of their entire outstanding loan amount, including interest.

“Even though the majority of the lenders have agreed to OTS terms, in the absence of consensus among certain lenders, the validity period of OTS has expired on September 30, 2023. The matter and the proposal submitted as above, along with other possible alternatives, are currently under discussion with and consideration of the lenders,” the company said in a stock exchange filing on Tuesday.

“The lenders have initiated the re-validation of the valuation of the company so that the current valuation, considering the current market trends and condition, is expected to be substantially lower than earlier such valuations considered for the purpose of OTS,” it added.

The lenders, led by the Khitans, are ICICI Bank, State Bank of India, Indian Bank, RBL Bank, Axis Bank, HDFC Bank, UCO Bank, Punjab National Bank, Yes Bank, and IndusInd Bank. The company’s debt stands at around ₹1,700 crore.

The management said it is confident of arriving at a suitable settlement or resolution acceptable to the lenders.

Meanwhile, the tea maker reported a 53.23 per cent year-on-year fall in its consolidated net profit to ₹61.15 crore for the second quarter of this fiscal from ₹130.76 crore for the same period last fiscal as its revenue declined. Revenue from operations witnessed a 13.92 per cent y-o-y decrease at ₹365.88 crore for the period under review.

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