Mcleod Board Gives Nod For Binding Term Sheet With Carbon Resources For Asset Sale

Tea producer McLeod Russel India Ltd. said its board gave the nod to execute a binding term sheet with Carbon Resources Private Ltd. for the sale of some tea estates.

The board today approved the execution of a binding term sheet with Carbon Resources to formalize the terms for sale of certain identified tea estates as a part of the company’s debt resolution process, McLeod Russel said in a stock exchange announcement.

McLeod Russel said the term sheet expresses both the companies’ interests in continuing exclusive discussions in the matter and creates a legally binding obligation on the parties. The size of agreement is 700 crore rupees ($85 million), subject to closing adjustments, it added.

The proposed transaction is subject to execution of the final definitive agreements and the satisfaction of conditions stipulated in the term sheet, as well as approvals from the company’s shareholders and lenders, according to the statement.

The proposed asset sale is part of McLeod Russel’s plan for a one-time settlement of the debt owed by the Kolkata-based company to its identified lenders. The debt resolution process is being undertaken by the lenders as per the Reserve Bank of India's Prudential Framework for Resolution of Stressed Assets.

The company, a part of Williamson Magor Group, began tea planting in India in 1869, and produces more than 80 million kilograms of black tea annually, according to its website.

McLeod Russel has 31 tea estates in the Assam Valley and two in the Dooars region of West Bengal, three factories in Vietnam, six estates in Uganda and the management control of the Gisovu estate in Rwanda, Africa.

(Note: $1 = 82.7767 Indian rupees)

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