Magor To Merge Std Batteries With Group Firm

The B M Khaitan-controlled Williamson Magor group has decided to merge Standard Batteries Ltd with one of the Magor group companies, confirmed a highly placed official in Magor.

There is a strong possibility that Eveready Industries, the group flagship could be the one with which Standard is merged.

The financial institutions (FIs), in a bid to resolve the fate of their holdings in Standard Batteries, want the promoters to either merge the company with the flagship Eveready Industries Ltd or any other group company, said a top FI source.

However, the top official in Magor did not confirm the fact that it will be merged with Eveready. Standard Batteries can be merged with any of the group companies - it can be India Foils or Eveready Industries Ltd.

 

Accordingly, the group is now planning the merger. We are currently negotiating with the FIs and the details of the merger will be finalised by the end of this month, said the official. FIs hold 33 per cent in Standard Batteries, whose assets have recently been sold off by the Khaitans to Exide Industries Ltd and while the Khaitans hold 47 per cent in the company.

Following the sale of the industrial undertakings of the Magor group company to Exide for Rs 100 crore, it has been speculated that FIs would sell their stake in Standard Batteries as the latter has now been reduced to a shell company.

In that case, the Khaitans' stake will rise substantially in Standard Batteries and subsequently in the merged entity. But such possibilities have been ruled out by top officials in Magor. However, the true picture is expected to be clear by this month.

Analysts have predicted the merger of Standard Batteries with a Magor group company, following its sale of assets to Exide.

The management had three alternatives -- to liquidate the company, to merge the company and to start new business in the company. And, as predicted, the management has finally opted for the merger option.

According to company sources, Standard Batteries will be left with a net surplus of about Rs 30 crore after paying its liabilities from the asset sale proceeds. Its equity capital was Rs 10.34 crore on March 31, 1997.