Eveready looks to raise Rs 250-300 crore from sale of non-core assets

Abhishek Law Kolkata | Updated on September 26, 2019 Published on September 26, 2019

Amritanshu Khaitan, MD, Eveready Industries India ltd   -  Photo: Debasish Bhaduri

Eveready Industries, which is having Rs 550 crore debt as of June this year, is looking to reduce debt through this move

Eveready Industries, the country’s largest dry-cell battery maker, is looking to raise nearly Rs 250-300 crore from sale of non-core assets, primarily land, and other real estate, as it looks to reduce debt and de-leverage its balance sheet.

According to Amritanshu Khaitan, Managing Director, Eveready Industries India Ltd is expecting to conclude the sale of two land parcels, one in Chennai and the other at Hyderabad, by the end of this fiscal. The sale is likely to fetch Eveready Rs 200 crore in proceeds. Other non-core assets have also been identified and their sale would help rake-in around Rs 50-100 crore.

The company, which is a part of the Khaitan family controlled Williamson Magor Group, has a debt of Rs 550 crore as on June this year.

“The focus will be on de-leveraging our balance sheet. We will look at selling non-core assets (properties),” he said on the sidelines of the 84th Annual General Meeting.

Khaitan is confident that the remaining amount can be paid off through the profits Eveready generate. Eveready has an EBITDA (earnings before interest, tax, depreciation and amortization) of nearly Rs 100 crore.

Focus will be on increased profitability , which is expected to come on the back of cost cutting measures, production rationalization, hiving off the loss making packet tea business, and an improvement in its core business – the battery segment. With BIS standards coming in, cheap Chinese imports are likely to be impacted. Some benefits will percolate to the company too.

In terms of cost cutting, production rationalization has been done by closing down a unit at Chennai that will lead to 2 per cent improvement in EBITDA. While another Rs 10-12 crore annual benefits is expected out of integration of the distribution channel of lighting and appliance businesses.

Consumer sentiments

Khaitan pointed out that consumer sentiments remain depressed and he is hopeful of demand picking up “soon”, especially with measures being taken by the Union government.

Batteries and flashlight continue to be major revenue driver for Eveready; while new businesses that include lighting and small appliances account for 30 per cent of its total turnover.

Talks are also on with the Indonesian partner, Universal Wellbeing, as Eveready looks to leverage its JV with the former and get into the FMCG space over the next few months.

On being asked whether the company would look to bring-in a strategic investor for its core battery and flashlights business, Khatian said: “We will inform accordingly as something concrete happens.”

He pointed of that restructuring was being done by the group entities of the Williamson Magor Group and in the next six to nine months time, a clear picture of how the group entities stand will emerge.

Published on September 26, 2019
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