Burman family may get joint promoter status at Eveready
MUMBAI: The Burman family, the single-largest investor in Eveready Industries Ltd with a 20% stake, may become joint promoters of the battery maker along with the Khaitan family, two people familiar with the talks between two groups said.
The shareholding of the Khaitan family plunged to just 4.5% from 44.1% over the past year as lenders sold shares of Eveready pledged with them after the promoter group defaulted on payments. The promoter group pledged their holdings in Eveready and tea producer McLeod Russel India Ltd to avail of loans and repay debts of McNally Bharat Engineering.
Last August, Eveready’s shares, held by Williamson Magor (an Eveready promoter entity), were pledged with IndusInd Bank for securing the outstanding dues of Seajuli Developers and Finance Ltd, the borrower company. The bank invoked the pledge held in the Eveready shares for the recovery of its dues from Seajuli.
The dramatic decline in the promoter holdings in Eveready opened the dry-cell battery maker to the risk of a hostile takeover. As lenders invoked pledges, the Burman family, which runs Dabur Ltd, stepped in as a white knight to buy out the shares from the open market to avert such a possibility.
“Burmans and Khaitans have an age-old relationship. If the Burmans and Khaitans become joint promoters and run the company together, a hostile takeover can be prevented. That’s why this is one of the options under consideration by both the parties,” said one of the two people cited above on the condition of anonymity.
An Eveready spokesperson said the company does not comment on speculative news.
“After a year of discussions between the Khaitans and the Burmans, the two families are considering an option to jointly control the group,” the person said. According to the market regulator’s takeover code, the Burmans will need to launch an open offer for Eveready shares if the family becomes a part of the promoter group.
“The Burmans are open to buying more shares from the open market to increase their shareholding rather than buying the stake from the Khaitans,” the person said.