McLeod Russel India recorded a 19.3 per cent drop in consolidated net profit to Rs 122.62 crore in the quarter ended September 30, on lower tea prices and higher wage cost. Profit in the year-ago period was at Rs 151.96 crore.

Revenues from operations stood at Rs 493.86 crore in the quarter compared to Rs 498.97 crore in the same period last year.

Sources indicated that last year tea prices had touched record levels on account of the loss in crop due to the Covid-19 pandemic and then dropped sharply. In addition, wage cost increased as the industry had signed a wage agreement. This impacted profitability, they said.

In the notes to results, the management said that bankers had reinitiated the resolution process of McLeod Russel India in terms of circular dated June 07, 2019 issued by the Reserve Bank of India.

McLeod owes banks around Rs 1,800 crore and with unpaid interest, the amount was around Rs 2,300 crore.

Inter-Creditor Agreement (ICA) for arriving at and implementing the resolution plan has since been confirmed and signed by all the bankers, the company said.

The forensic audit for utilisation of funds borrowed in the past, conducted on behest of lenders had been completed earlier and finding on utilisation of funds borrowed had been accepted by them, the company informed.

The Techno Economic Viability (TEV) study and valuation carried out earlier are being re-vetted and possible credit rating will then be obtained in due course of time.

McLeod also said that the draft resolution plan prepared earlier by SBI Capital Markets Limited, along with their recommendation concerning resolution plan accordingly would be modified in terms of ICA and placed before the bankers for their consideration.

Regarding inter-corporate deposits (ICDs), the notes mentioned that the management believes that the outstanding dues, net of provision for amount considered doubtful, would be recovered/adjusted and or/ restructured considering the outcome of the resolution plan under consideration and no provision/adjustment is required at this stage.

McLeod had given ICDs to promoter group and certain other companies and the outstanding on amounted to Rs 2,802.36 crore as at September 30, 2021.