10 September 2019: Williamson Magor Group (WMG) chairman Aditya Khaitan said on Monday the three key group companies — McLeod Russel, McNally Bharat Engineering and Eveready Industries — would undergo a “makeover” under the joint leadership of the Khaitan family, lending institutions and prospective partners.
A group-level restructuring is underway, involving debt recasting, sale of assets and roping in of strategic investors, Khaitan told shareholders at McLeod Russel’s general body meeting held in Kolkata. The group is seeking to reduce debt at its companies. McLeod Russel has debt of around ₹1,700 crore. McNally Bharat and Eveready Industries are estimated to have debts of ₹1,500 crore and ₹700 crore, respectively.
Responding to shareholders who questioned Khaitan about the rationale behind issuing inter-corporate deposits to McNally Bharat whose repayment has now become uncertain, Khaitan said: “It was a mistake. The company that was lent to (McNally Bharat) was in serious trouble and the mistake we made was to see whether that company could turn around. The decision has taken a toll on the company and the group.”
“Group companies have already stopped lending to McNally for some time now. All the three WMG entities are looking at restructuring themselves independently,” he said.
While McLeod Russel, which deals in tea business, has been selling its estates to raise capital to service loans, engineering firm McNally Bharat has signed a deal with a consortium of investors led by Turbovent Industries for infusion of Rs 150 crore, subject to approval of a resolution plan outside the bankruptcy court. Meanwhile, Eveready Industries is in advanced talks with Duracell, owned by Warren Buffett’s Berkshire Hathaway, for a strategic sale of its battery and flashlight businesses.