McLeod Russel in discussion with NARCL for composite debt resolution

McLeod Russel submits initial proposal to NARCL as part of a composite debt resolution effort amid continued financial distress and narrowed losses in FY25

McLeod Russel India has submitted an initial proposal to the National Asset Reconstruction Company Limited (NARCL) for resolution of its debt.

 

In March this year, most lenders—except IndusInd Bank—assigned their loan accounts in India’s largest bulk tea producer to NARCL.

 

In its results disclosure, McLeod stated that borrowings from banks aggregating to Rs 1,033.03 crore, representing the principal amount, had been assigned to NARCL. This was done under an Assignment Agreement dated 12 March 2025, executed under the provisions of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI Act).

 

According to McLeod sources, the company is now seeking a composite resolution of its total debt and has initiated engagement with NARCL.

 

In its notes to results, McLeod mentioned that management is confident that a resolution will be reached regarding borrowings from asset reconstruction companies (ARCs) and banks, aggregating to Rs 1,461.07 crore. The company expects to arrive at a sustainable repayment amount, including associated costs, along with an agreed repayment timeline in due course.

 

In addition to NARCL, McLeod will also have to engage with IndusInd Bank and JC Flowers ARC.

 

McLeod also disclosed that its financial position remains under strain, as it continues to face prolonged financial distress. 

 

While realisation from tea sales had improved to some extent, the company suffered crop losses due to adverse weather conditions, impacting overall operations and performance.

 

The company further noted that inter-corporate deposits (ICDs) extended to various promoter group entities and others in earlier years, along with accrued interest, remain outstanding as of the reporting date.

 

In the January–March quarter (Q4FY25), McLeod reported a net loss of Rs 174.41 crore, down from Rs 218.42 crore in the corresponding quarter of the previous year. Revenue from operations stood at Rs 165.47 crore in Q4FY25, compared to Rs 194.95 crore a year earlier.

 

For the full year FY25, revenue was Rs 1,185.41 crore, compared to Rs 1,135.89 crore in FY24. The net loss for FY25 stood at Rs 197.87 crore, down from Rs 311.59 crore in FY24.