Eveready East Africa #ticker:EVRD has cut a Sh75 million cheque to major shareholder Naushad Merali in repayment of a loan that the billionaire businessman pumped into the battery dealer.
Mr Merali loaned Eveready the amount early last year to ease its debt pressures following the closure of its Nakuru factory.
The battery maker, which booked a gain of Sh397.3 million from the sale of the factory land and equipment, says it spent this income to pay off all its debts, including to Mr Merali who had been receiving interest payments on the loan.
Jackson Mutua, Eveready’s chief executive, told the Business Daily in an interview that the firm has also paid Sh368.3 million in loans it owed commercial banks.
Eveready in January 2016 made a cash call from its principal shareholders to seal a financial hole created by delayed payments from US-based Energizer Holdings on whose behalf it had manufactured batteries since 1967.
Mr Merali, a director and a major shareholder in Eveready with a 35.12 per cent stake, funded the battery maker to help keep it afloat.
Energizer, an Eveready shareholder with a 10.5 per cent stake, has since terminated the partnership-- prompting a court battle that revealed Mr Merali’s bailout.
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