Yes Bank, the private sector lender on Thursday said that it has acquired over 9 percent shares of the famous battery maker Eveready by invoking the pledged shares following the failure of repayment of the loan by a group company.
The bank acquired 68,80,149 shares following the breach of terms of credit facilities sanctioned by YES Bank.
The lender said it has acquired shares of Eveready on the invocation of pledge subsequent to default/breach of terms of credit facilities sanctioned by Yes Bank to the group company Mcleod Russel India Ltd (the borrower).
Credit rating for Mcleod Russel’s long-term borrowing program of the company and also the short term rating was downgraded by Rating Agency Icra by many notches to default grade. Icra also said the ratings will remain on “Issuer not cooperating” category.
Eveready and Mcleod – which is engaged in the tea business – belong to the BM Khaitan group.
Eveready’s consolidated turnover in 2018-19 stood at ₹1,541.86 crore, up from ₹1,495 crore in the preceding fiscal year.
Eveready in 2017 had announced a 50:50 JV with its group company McLeod Russel to manage the packet tea through an SPV – Greendale India Ltd. Both the companies were supposed to invest ₹20 crore each, but both the group companies are facing concerns in managing group level debt raised by the pledge of shares.
In a recent development, Price Waterhouse & Co Chartered Accountants LLP quit as Eveready Industries’ auditor, saying it was unable to obtain sufficient audit evidence of inter-company deposits and its recovery.
With new owners at the helm of it and Madhu Jayanti investing big in the tea business, we can expect a revamp of the Eveready business.