Indian Tea Association Files Insolvency Application Against McLeod Russel: What’s Next for the Tea Giant?

McLeod Russel India Ltd., the world’s largest tea producer, is facing a fresh insolvency application filed by the Indian Tea Association, adding to its ongoing financial troubles and industry uncertainty.

 

Key Highlights:

 

The Indian Tea Association has filed an insolvency petition against McLeod Russel, joining a list of creditors seeking resolution for unpaid dues as the company’s debt crisis deepens.

 

This move follows earlier insolvency proceedings triggered by other lenders and financial institutions, including IL&FS and Techno Electric & Engineering, over alleged loan defaults running into hundreds of crores.

 

The National Company Law Tribunal (NCLT) has previously admitted insolvency applications against McLeod Russel, and the company has contested the formation of a creditors’ committee and the ongoing resolution process.

 

McLeod Russel’s total outstanding debt stands at over ₹1,460 crore, with recent developments seeing a major portion of this debt transferred to the National Asset Reconstruction Company Ltd (NARCL) at a significant discount, giving the company some breathing room but not resolving all issues.

 

The company’s financial woes are linked to a prolonged downturn in tea prices, rising costs, and unrecovered loans to group entities, notably McNally Bharat Engineering, which is also under insolvency.

 

Experts believe the outcome could lead to a change in ownership or major restructuring, with the tea industry closely watching the impact on production, supply, and jobs.

 

McLeod Russel, part of the Williamson Magor Group, operates 33 tea estates and employs over 50,000 people, making the resolution of its insolvency a matter of industry-wide significance.

 

Source: Reedlaw, Economic Times, Business Standard, Moneycontrol, The Telegraph