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Bulk tea manufacturer, McLeod Russel India Ltd, saw its losses widening and posted a standalone net loss of ₹71 crore for the quarter ended December 31, 2022, as compared with ₹35 crore same period last year.
Revenue from operations on a standalone basis increased by nearly 22 per cent at ₹412 crore during the quarter under review as compared with ₹339 crore same period last year.
It is to be noted that the Kolkata bench of the National Company Law Tribunal (NCLT) has recently admitted IL&FS Infrastructure Debt Fund’s insolvency petition for initiating CIRP (corporate insolvency resolution process) against McLeod Russel. IL&FS Infra Asset Management Limited (IIAML), an asset management company, manages IL&FS Infrastructure Debt Fund (IIDF). IIDF, a financial creditor to McLeod, filed the petition under Section 7 of the Insolvency and Bankruptcy Code against the company for default in payment of ₹347 crore as on November 12, 2019. The date of default was stated as July 9, 2019.
Also read:McLeod Russel India board approves pact with Carbon Resources for debt settlement
The admission of McLeod under insolvency is likely to derail Khaitans’ plans to execute an “exclusivity agreement” with Carbon Resources to negotiate a mutually agreeable mechanism to offer a proposed one-time settlement of the company’s debt to lenders.
According to sources, the Khaitans are likely to consider the possibility of approaching NCLAT and also look at an out-of-court settlement to pull the company out of insolvency process.
In August 2021, NCLT, New Delhi, had admitted an insolvency application filed by Techno Electric and Engineering under IBC for a default on repayments of term loans of around ₹100 crore. The tribunal later gave its approval to the withdrawal of CIRP against McLeod after the promoters reached a settlement with Techno Electric, providing a major relief to the financially-stressed Williamson Magor group.
The performance of the company over the period even though has improved, its financial position continues to be under stress, it said in the notes to accounts. The Inter-Corporate Deposits (ICDs) given to various group and other companies in earlier years along with interest to the extent accrued earlier are lying substantially outstanding as on this date. Non-recovery of such ICDs have caused financial constraints resulting in hardship in servicing of the short term and long-term debts and meeting other liabilities.
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