Carbon Resources, which had earlier submitted a non-binding letter of intent to lenders of Mcleod Russel to acquire a controlling stake in the debt-laden tea major, is now planning to make a binding proposal, two sources familiar with the matter told FE.

Both Carbon Resources and another company, MK Shah Exports, are yet to receive formal responses from the lenders on their offers for Mcleod Russel.

The carbon products manufacturer alleged that lenders are “dragging their feet” on its Rs 1,245-crore offer for the troubled company, part of the financially stressed Williamson Magor group. “Carbon Resources’ offer is still on the table. However, lenders are dragging their feet…They are stonewalling the efforts to provide documents. For around three years, Mcleod has been an NPA account. Certain loan amounts have already been written off from the lenders’ books,” the sources cited above said, adding: “The company is now planning to make a binding offer.”

According to the offer made in September, Jalans-owned Carbon Resources would infuse upfront equity worth Rs 300 crore and a debt of Rs 945 crore to resolve Mcleod’s outstanding debt. Secured lenders would be paid in full, while unsecured lenders would have to take a 45% haircut as the Jalans proposed to take over the company.

The lenders to the teamaker 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. With promoter Khaitans having only a little over 6.2% stake in the company, debt stands at over Rs 1,700 crore.

Carbon Resources had picked up a 5.03% stake in McLeod Russel from the open market last month. The company said the stake purchase was to show lenders that it is keen to acquire the company, which currently has 31 gardens in Assam and two in Dooars.

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MK Shah Exports, which made a counter offer to the lenders by putting forward a proposal to purchase tea gardens from McLeod to help the company reduce debt and realise the restructuring plan, is also waiting to hear from them. MK Shah Exports, India’s largest producer of orthodox varieties of tea, has proposed to extend its support to existing promoters in the ongoing restructuring plan.

“The lenders have acknowledged the receipt of our letter of intent. They will call us, but all these things take time,” Himanshu Shah, chairman, MK Shah Exports, told FE.

“If the biggest player such as Mcleod Russel gets disrupted and broken up, the tea industry and every player suffers definitely. We wanted to keep the integrity and impeccability of the leading company. Now, they are in a problem. As their debt restructuring proposal is going on and there is an issue of funds, we are there to pitch in to bring back the incumbent promoter and let them be given a chance. We proposed to buy gardens from them, it will help them reduce the company debt to a sustainable level,” Shah said.

“The talks on debt restructuring proposal, put forward by the promoters, have been going on for more than a year. Because of the pandemic, it got delayed. In between, lenders received an offer from a company (Carbon Resources), which wants a hostile takeover. As a counter to that, this is the action which has been taken,” Shah said.

Meanwhile, Mcleod Russel chairman Aditya Khaitan told the company’s shareholders during its annual general meeting held on September 30 that banks have “concluded” in terms of what the debt restructuring resolution should be. The company is now awaiting necessary clearances from rating agencies.