Kolkata: Household battery manufacturer Eveready Industries India Ltd has sold the money-losing industrial battery business of its French unit, Uniross SA, to pare costs and liabilities.
Uniross sold two units, one in China and the other in France, to a “French individual” who agreed to take over the liabilities along with the factories, according to Suvamoy Saha, Eveready’s director and chief financial officer.
Uniross didn’t earn anything from the sale concluded a few months ago, Saha said.
Eveready declined to disclose the identity of the person, or the details of the transaction.
“Most of Uniross’s losses were due to these two subsidiaries,” said Deepak Khaitan, Eveready’s vice-chairman and managing director. The deal would help Uniross pare losses substantially, Khaitan said.
Uniross posted a loss of Rs 52.36 crore on a revenue of Rs 129.45 crore in fiscal 2011.
Around Rs 20 crore of Uniross’s loss was on account of its inability to recover fixed operating costs. Uniross still retains its household battery business, which accounted for almost two-third of its revenue last fiscal.
In 2009, Eveready acquired an 80% stake in Uniross through a special purpose vehicle with the aim of getting a toehold in Europe, Southeast Asia and Africa.
Uniross was already in financial stress when Eveready acquired it. The timing of the Uniross acquisition turned out to be wrong in view of the economic slowdown in Europe, Saha said.
Uniross has subsidiaries in Hong Kong, South Africa, the UK, Germany and Italy. Saha remains hopeful of turning around Uniross within a couple of years.
Uniross was on course to break-even in the current year and become profitable in a couple of years, he said. Besides selling the industrial battery business, Uniross is laying off people under “a major restructuring drive”, according to Khaitan.
In France alone, it has cut its workforce to 10 from 100, said Khaitan. The firm is looking to pare annual overheads by €3 million, he added.
Eveready also plans to introduce Uniross’s products in new markets such as Nepal, Bangladesh and Sri Lanka, Khaitan said.