Kolkata-based BM Khaitan created history by buying out Indian businesses of Union Carbide in the 90s, giving him a dominant position of dry-cell battery business
The Williamson Magor group is seeing the passing of the baton from Brij Mohan Khaitan, 92, to his younger son, Aditya Khaitan. The group patriarch is retiring from the chairmanship of most of the group entities like Eveready Industries and Mcleod Russel due to his advancing age at a time when the group is passing through its toughest time.
Khaitan resigned from as chairman of Eveready due to his old age, the company informed the BSE on Monday.
Kolkata-based BM Khaitan created history by buying out crisis-ridden Indian businesses of Union Carbide in the 90s, giving him a dominant position of dry-cell battery business which continues till today.
He also created the country's largest tea plantation entity through acquisitions of the British companies like Williamson Magor in the 60s, McLeod Russel in the 80s and then went on to buy out several of Hindustan Unilever's gardens in 2005.
But his resignations from the chairmanship of the group is happening when listed entities like Eveready Industries, McLeod Russel and McNally Bharat, are all in deep financial woes with the group trying in vain to pump in more money or monetise assets without any major respite in sight, forcing rating agencies to downgrade the companies in succession.
Efforts to keep the group floating is being spearheaded by Aditya Khaitan, who had been managing McLeod Russel but since the death of his elder brother Deepak Khaitan in 2015 started guiding engineering outfit McNally Bharat and also Eveready, which is now managed by Deepak's son Amritangshu.
Time is running out for the management with India Ratings last week downgrading Eveready from AA- to A+ with negative outlook due to continued high net leverage and weakened liquidity amid continuous financial support extended to group companies and delayed asset monetisation.
McLeod Russel suffered a similar rating downgrade a month back with Icra putting it under negative outlook.
Eveready needs to reduce debt by Rs 140 core in fiscal 2020 for the leverage to reduce to an acceptable level, which can only be achieved by the sale of Hyderabad asset or full repayment of inter-corporate deposits. Any further delay in deleveraging which could further impact the company's liquidity, the rating agency has warned.
During fiscals 2018 and 2019, Eveready extended ICDs of around Rs 134 crore and Rs 76 crore, respectively, to its group companies, and advances amounting to Rs 75-80 crore were outstanding. The rater has also expressed concern over the high pledge by the promoters, which is close to half of their holdings.
Poor profitability coupled with exposure to group entities has kept Mcleod, country's largest tea plantation, under stress though it has been selling off its prized gardens occasionally to raise money.
HANGING BOOTS
- Kolkata-based BM Khaitan created history by buying out Indian businesses of Union Carbide in the 90s, giving him a dominant position of dry-cell battery business
- He also created the country's largest tea plantation entity through acquisitions of the British companies like Williamson Magor in the 60s
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