After the invocation and sale of its shares, BIL now holds only 8 lakh shares of Eveready, representing a mere 1.10% stake.
In the latest setback to the financially-stressed Williamson Magor group, promoted by the Khaitan family, Aditya Birla Finance has sold 25 lakh shares of dry cell battery major Eveready Industries following invocation of those pledged shares by the financial services company. It has resulted in further dilution of the promoter stake in Eveready, which remains a key company for the group.
These 25 lakh equity shares of Rs. 5 each, representing 3.44% of the paid-up share capital of Eveready Industries (EIIL), the flagship company of the Williamson Magor group, had been held by promoter group investment firm Bishnauth Investments (BIL).
In a stock exchange filing of the battery maker on Thursday, BIL said it used to hold 33 lakh shares of Eveready, representing a 4.54% stake. Of these, 25 lakh shares were pledged to Aditya Birla Finance and those were sold by the financial services company on November 1.
After the invocation and sale of its shares, BIL now holds only 8 lakh shares of Eveready, representing a mere 1.10% stake. This has resulted in further dilution of Williamson Magor Group’s holding in EIIL. As per the disclosure made by the company, the promoter and promoter group had 30.83% stake in Eveready by the end of the second quarter this fiscal. If selling of pledged share is taken into account, the shareholding of the Khaitans in the battery major would fall well below 30%. On Thursday, Eveready fell 3.94% to end at Rs. 50 on the BSE.
Notably, in July, Yes Bank had acquired over 9% stake in the battery maker by invoking pledged shares, following a loan default by group company McLeod Russel. Williamson Magor Group, the owner of Eveready, has been facing a huge group-level debt pressure. It has started group-level restructuring to resolve the financial stress issue that includes possibilities of inducting a strategic partner in Eveready as well.
Incidentally, for Eveready, the amounts of outstanding inter-corporate deposits (ICDs) to the group companies remained almost the same for the first and the second quarters. The battery maker, however, did not make any provision for the outstanding ICDs, amounting to around Rs. 349 crore, during H1FY20 as it believed that the outstanding dues should be recovered on the back of ongoing promoter group-level restructuring.