McLeod Russel's debt resolution gains pace as TEV report nears completion

McLeod Russel's debt restructuring talks with NARCL and other lenders have intensified, with consultants expected to submit the techno-economic viability report within weeks as the tea major's revised

Amid ongoing talks with the National Asset Reconstruction Company Ltd (NARCL) on debt restructuring, McLeod Russel India, the country’s largest bulk tea producer, has filed a revised resolution plan as a techno-economic viability (TEV) study gets underway. Parallel submissions have been made to other lenders for the balance debt.

 

In its Q2FY26 results disclosure, McLeod Russel said it had started pursuing NARCL for resolution concerning its borrowings. A resolution plan specifying the repayment amount, term and resources over a fixed period was submitted.

 

What progress has been made in the NARCL review process? 

Following discussions and deliberations with NARCL, McLeod Russel revised its plan, with the latest submission made on June 17, 2025. Explanations and clarifications sought by NARCL are being provided, the company said.

 

Meanwhile, consultants have been appointed by NARCL to carry out a TEV study of the company. According to company sources, the report may be submitted within two to three weeks.

 

Which lenders are part of the debt restructuring? 

In March this year, most lenders, except IndusInd Bank, assigned their McLeod Russel loan accounts to NARCL. Sources said resolution plans for the remaining ₹428 crore of debt have been submitted to IndusInd Bank and JC Flowers Asset Reconstruction Company (ARC).

 

The company’s total borrowings from banks and ARCs amount to about ₹1,900 crore.

 

What options are being considered for raising capital? 

Raising equity through the sale of tea gardens or bringing in an external investor to fund the promoters’ contribution in the restructuring is being evaluated. “It all depends on what the final number is and the plan. Any investor would like to know that before committing money,” a source said.

 

What are the company’s expectations from the final plan? 

In its notes to results, the company said management was confident that, upon completion of the resolution, a sustainable repayment structure for borrowings aggregating ₹1,461.07 crore, along with a cutback payment of ₹4.73 crore and related costs, would be agreed upon and implemented in due course.

 

What has been McLeod Russel’s debt history? 

Debt restructuring talks with banks have been underway for several years. The company had earlier been admitted to the National Company Law Tribunal (NCLT) for debt resolution under the Insolvency and Bankruptcy Code (IBC), but later settled with lenders such as IL&FS Infrastructure Debt Fund and Techno Electric & Engineering.

 

How is the tea industry environment affecting McLeod Russel? 

The broader tea industry has faced margin pressures, with falling prices and rising input costs. McLeod Russel’s resolution plan factors in these changing sectoral conditions.

 

In the July–September quarter (Q2FY26), McLeod Russel India reported a consolidated net profit attributable to owners at ₹29.06 crore, down 65.6 per cent from ₹84.54 crore a year earlier. Revenue from operations stood at ₹362.83 crore, a 19.8 per cent decline from ₹452.62 crore in the corresponding period last year.