Private sector lender Yes Bank Thursday said it has acquired over 9 per cent shares of battery maker Eveready by invoking pledged shares following loan default by a group company.
"Yes Bank, pursuant to invocation of pledge of shares, acquired 68,80,149 equity shares... constituting 9.47 per cent of the post-issue paid-up share capital as at July 3, 2019, of Eveready Industries India Ltd," Yes Bank said in a regulatory filing.
The lender said it has acquired shares of Eveready on 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).
The lender also said that it is a one-time transaction.
Eveready and Mcleod - which is engaged in the tea business - belong to the B M Khaitan group.
Eveready's consolidated turnover in 2018-19 stood at Rs 1,541.86 crore, up from Rs 1,495 crore in the preceding fiscal year.
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Earlier on June 30, Eveready had announced an agreement with the Madhu Jayanti International Private Ltd (MJlPL) for its loss making packet tea business to reduce stress on working capital.
Eveready in 2017 had announced a 50:50 JV with its group company McLeod Russel to manage the packet tea through a SPV - Greendale India Ltd. Both the companies were supposed to invest Rs 20 crore each, but both the group companies are facing concerns in managing group level debt raised by 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.