In a major development for tea major Mcleod Russel, a city-based electrode paste producer has expressed its intention to acquire the debt-laden company.
Carbon Resources, a producer of critical carbonaceous raw materials, has sent a non-binding letter of intent to the lenders to Mcleod Russel to acquire a controlling stake in the company, which belongs to the financially stressed Williamson Magor group.
According to sources, in the letter, the company offers to infuse upfront equity worth Rs 300 crore and a debt of Rs 945 crore to resolve Mcleod Russel’s outstanding debt. The tea maker currently has a debt of over Rs 1,700 crore.
McLeod earlier informed that its lenders were evaluating a resolution process for it as per the Reserve Bank of India’s guidelines.
Notably, Carbon Resources picked up a 5.03% stake in McLeod from the open market on Friday, sending the stock rising to the upper circuit of Rs 28.35.
Amid the takeover buzz, Mcleod Russel scrip also touched the upper circuit of Rs 34 on Monday.
Notably, the Khaitan’s, promoters of the company, currently hold a little over 6.2% stake.
Earlier this year, Khaitan lost control of dry cell battery major Eveready Industries as the Burman family, promoter of FMCG maker Dabur India took control and became the promoter.
The Burmans in July this year reclassified themselves as the promoters of Eveready, replacing the Khaitan’s.