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A report published by the Financial Express has suggested that the Burmans, promoters of Dabur India, have taken over the position of promoters of dry cell battery maker Eveready.
Eveready was in trouble as its debt was piling on. In 2019, Aditya Birla Finance sold 25 lakh shares of the company which was pledged against its loan, which severely depleted the promoters' stake in the company. For the first time ever in October 2020, the shareholding of the promoters fell below 5% as the company's creditors continued to sell off their holdings to recover their dues.
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According to its FY21 annual report, the company had an outstanding debt of Rs 418.12 crores. The company had planned several steps to improve its standing and manage its high debts.
The company had refinanced high-cost debts at lower rates which reduced the company's interest burden. During the year, the company's cash flows also showed improvement as the company's profitability saw significant growth. Its sales were showing robust growth as the company planned to be debt-free by 2023.
In July 2020, the Burmans of the Dabur Group raised their holding in the company to 19.84% and become the largest shareholder of the battery maker. They guided the company into diversifying the marketing of lighting and electrical products along with small home appliances to improve the company's profitability.
In March 2022, the Dabur Group made an open offer to acquire an additional stake of 26% in the company and take control of the company and run it 'professionally'. Chairman of Eveready, Aditya Khaitan, & MD Amritanshu Khaitan, resigned shortly after the offer was made.
The offer was reported to be unsatisfactory since the offer price was discounted & not the prevailing market price. However, the company has acquired a further 14% in the company, leveraging its stake up to 38.38%.
After replacing the Khaitans, nominees of the Burmans are reportedly going to join the Board of Eveready within a week. Shares of Eveready are trading around Rs 313.05 per share, down 0.70% currently.
Article by Aman Agarwal.
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