NARCL and McLeod Russel: Lenders Assign Tea Major’s Loans
Why in the news
NARCL announced that most lenders have handed their McLeod Russel India loans to it, which could speed up resolution of the stressed tea company’s debt.
About NARCL
- An asset reconstruction company set up to take over and dispose of commercial banks’ stressed assets.
- Assets worth Rs 2 lakh crore were identified for its first phase.
The assignment
- Agreement dated 12 March 2025; ICICI Bank as lead with SBI, HDFC Bank, Axis Bank, PNB, UCO Bank, Indian Bank and RBL Bank.
- NARCL is now lender and secured creditor, holding the related rights, securities and guarantees.
- IndusInd Bank stayed out and holds 4.90%.
Debt position
| Item | Detail |
|---|---|
| Total principal outstanding | ₹1,461.06 crore |
| JC Flowers ARC (Yes Bank’s loan) | 24.39% of debt |
| December 2024 sale attempt | ₹1,104.69 crore debt, reserve price ₹700 crore; no bids |
Outlook
- With only NARCL, JC Flowers ARC and IndusInd left, a detailed restructuring plan becomes easier.
- Talks have dragged for nearly six years; cases ran in the DRT and NCLT Kolkata, and four proposals backed by Carbon Resources, including a one-time settlement, stalled.
- Fresh restructuring should suit the tea season and ensure long-term viability.
Exam angle
- NARCL: bad bank for stressed loans; lead bank here: ICICI Bank.