Eveready to sell land to pay debt

A difficult business scenario has prompted Eveready Industries India Ltd, the dry batteries major, to once again look at selling some family silver to stay afloat and cut debt.

The company, which disposed of a 15-acre property at Navi Mumbai for Rs115 crore in 2007, plans to sell about 60-70 acres in New Delhi, Hyderabad and Bangalore, non-executive vice chairman Deepak Khaitan said.

“We plan to sell those assets over a period of time. But there would be no distress sale. Deals would be done only when sentiment in the real estate sector improves and we get good price,” said Khaitan.

Eveready also has about 7 acres in Chennai, but this can’t be sold as the land falls under coastal regulation zone, he said.

The proceeds from land sale would be used initially to pay off debts, which currently stand at close to Rs200 crore.

“If sold at the right time, our Hyderabad property of 25 acres itself will help us get around Rs400 crore, enough to pay off our debt,” Khaitan said.

The surplus land emerged over the years as Eveready shifted some battery plants to the outskirts and by shutting down some unviable ones.

The Navi Mumbai property, for example, used to house a plant that made electrolytic manganese dioxide, a raw material used in batteries, but producing this in-house became an unviable proposition.

Similarly, Eveready shuttered its Hyderabad plant in 2009 after a continuous fall in the sales of D-sized batteries used mostly in rural areas. This freed up 25 acres in a prime locality.

D-sized batteries are used to power torches and radios.

Unfortunately, Eveready is yet to make its mark in AAA batteries, which are used in electronic gadgets — from cameras to toys — a segment that has been boomed over the last decade.

But the company is trying to offset headwinds by renewing focus on marketing and advertising. It recently roped in Bollywood actor Akshay Kumar — years after Amitabh Bachchan peddled some of the company’s ware.