| (From left) Eveready Industries India Limited whole-time director R. S. Jhawar, chairman B. M. Khaitan and executive vice-chairman and managing director Deepak Khaitan at the company’s AGM in Calcutta on Thursday. Picture by Kishor Roy Chowdhury.
Calcutta, Sept. 12: Eveready Industries India Limited (EIIL) has appointed I-Sec and RaboBank to look at the feasibility of demerging its tea and battery businesses.
Addressing shareholders at the company’s 67th annual general meeting (AGM) here today, executive vice-chairman and managing director Deepak Khaitan said: “We have appointed I-Sec and RaboBank to see if splitting tea and battery businesses is a profitable proposition.”
The consultants have been asked to suggest ways in which the company can bring down interest costs and boost finances. “They will also find out if demerger of businesses should be done or not. “Ideally, I would like to both businesses to remain together, not in two parts,” he added
The report will be ready by November-end, but a meeting with RaboBank is due in two weeks, Khaitan said.
The tea business came to Eveready after McLeod Russel was merged with it in 1996. Later, Bishnauth Tea Company was also folded into the firm in April 2000.
Khaitan assured shareholders at the AGM that the company will bounce back into the black in the current financial year. “We will book profits from our operations and not through sale of assets,” Khaitan said.
The company suffered a loss of Rs 1.41 crore in 2001-02, but Khaitan said he expects cash flows to improve over the next 18 months. It has not been able to raise money by selling its non-profitable gardens in Dooars yet.
Meanwhile, Eveready has decided to promote WM brand of bulk tea. “We have seen that WM has great strength. WM means quality tea,” Khaitan said. It plans to sell 4,000 tonne of packet tea this year, which is expected to increase to 6,000 tonne in the following year.
Eveready’s batteries have been exported to 14 countries — including US and UK — under the Lava brand-name.
Earlier, company chairman B. M. Khaitan said while it is difficult to predict the trend of tea prices, steps taken to rationalise working of estates, efforts to improve quality should help the company earn more from the premium grades at home and foreign markets.