This troubled tea maker rises 63% in 5 sessions. Here's why

Debt-ridden McLeod Russel India has been in favour on Dalal Street lately as the company has surged sharply in the last one week.

The tea producer has zoomed as much as 63 per cent in the last five trading sessions as Carbon Resources picked up a 5.03 per cent stake in the company and sought to settle its debt with bankers.

Carbon Resources wants to provide a resolution plan for the debt of the bulk tea producer with a Rs 1,245-crore offer, they said. McLeod Russel has a total debt of more than Rs 2,000 crore.

The purchase of stake by the Carbon Resources, an electrode paste maker, is a fresh blow to Williamson Magor Group, the parent of beleaguered McLeod Russel India.

On Tuesday, shares of McLeod Russel India zoomed as much as 10 per cent, locked in buyer's circuit to Rs 37.40, hitting its new 52-week high. The scrip settled at Rs 34 on Monday, after rising 20 per cent during the session.

"We have acquired a 5.03 per cent stake in McLeod Russel and have sent our letter to bankers, offering to infuse upfront equity (capital) worth Rs 300 crore and a debt of Rs 945 crore for a resolution for the company's outstanding debt.

"We have already sent our legal team to take this forward and have sought a 60-day time from bankers to conduct due diligence," Mahendra Sharma, who heads the finance at Carbon Resources, reported PTI.

Carbon Resources purchased 4.95 million shares of McLeod Russel from the open market on September 16 according to the exchange date. On the acquisition of the company he said that the option remains open and things will be clearer soon.

McLeod Russel is promoted by the BM Khaitan family, and at the end of June, promoters owned a 6.25 per cent stake in the troubled bulk tea producer.