Khaitan: Widening horizon
Calcutta, May 14: Eveready Industries India Ltd will pick up an 80 per cent stake in France-based Uniross SA for 10 million euros.
The company today entered into an agreement with Paris-based CG Holding, which currently holds around 70 per cent in Uniross, for securing the deal.
The city-based firm signed a term sheet with CG Holding for investing up to 10 million euros in a special purpose vehicle, which in turn would acquire the stake in Uniross.
Uniross SA has been suffering losses and is under a restructuring process. We are injecting cash into the company, Eveready Industries vice-chairman Deepak Khaitan said. This is the first overseas acquisition by Eveready, he said.
Of the 10-million-euro investment, 6 million euros will be in equity and the remaining will be debt, Khaitan said.
Eveready, which intends to fund 50 per cent of the total estimated spend through internal accruals, is in talks with two to three banks for the rest.
The company expects to seal the deal in a month.
Uniross manufactures and distributes rechargeable batteries and allied products.
According to the agreement, after the stake dilution, CG Holding will hold around 20 per cent in Uniross.
The deal is subject to certain conditions and approvals.
Uniross is expected to report a turnover of 25-30 million euros at the end of June 2009.
Uniross SA and its subsidiary companies have businesses in Europe, South Africa, Hong Kong, China and India. The company has a manufacturing base in China.
We will continue with the Uniross brand and the Eveready brand will remain as it is, Khaitan said.
After the acquisition is over, Eveready will have a strong share in the global market, he said.
At present, Uniross has about 10 per cent share in the global rechargeable market, excluding China.
Eveready posted an after-tax profit of Rs 19.40 crore in the last fiscal against a loss of Rs 19.32 crore in 2007-08.
The company had said it was expecting a 10-12 per cent growth this year. Debts are also expected to be down from the current Rs 300 crore.