The mighty Burmans of Dabur may step in as a white knight to the debtladen Khaitan family in dry cell battery maker Eveready Industries Ltd.

The Burmans have already emerged as the single largest shareholder in Eveready Ltd ahead of the promoter Khaitans after a flurry of stock market transactions last week.

Sources said the Burman family, promoters of FMCG major Dabur India Ltd, would continue to remain the majority owner and the Khaitans will manage the battery maker in concert with them.

The Burmans now hold 19.84 per cent stake in Eveready while the Khaitan family’s holding has fallen to 15.07 per cent.

Last week, IL&FS Financial Services invoked the pledged shares of the Khaitans and offloaded a 7.09 per cent stake in the open market. The Burmans picked up that lot and bought some more.

“The Burmans may partner with the Khaitans going forward and manage the business. They may also join the board and become copromoter,” said sources who have direct knowledge of the developments.

The two families may coinvest in Eveready. “Warrants may be issued to the Burmans and the Khaitans which would bring fresh funds into the company, as and when required,” sources added.

A strong partner, like the Burmans, may secure the future growth for Eveready without driving the Khaitans completely out of picture. Previously, there has been speculation that global battery giant Duracell or Energiser may acquire the battery business, which contributed 60 per cent of the topline last fiscal.

Amritanshu Khaitan, grandson of Brij Mohan Khaitan — the founder of the Williamson Magor Group — is the managing director of Eveready, while Aditya Khaitan, BM’s younger son, is the chairman.

There was no official confirmation to the proposed arrangement from either side. Mohit Burman, vice chairman of Dabur said: “As of now there are no such plans.”

Industry sources pointed out any such plans, which warrants change in the management, would require prior regulatory approval, especially from Sebi.

Moreover, the Burmans may need to make an open offer in Eveready if they want to become a copromoter.

“A clear picture will emerge in a month,” sources added.

Meanwhile, the Eveready scrip is on a roll. It has risen by 40 per cent to close at Rs 115.45 on BSE from July 13, a day before the Burmans, who trace their roots to Bengal, announced their latest round of stock purchase.

Debt trap

Mounting losses at McNally Bharat Engineering Company Ltd proved to be a huge drag on the entire WM group over the past few years.

The promoter group entities which held the shares in three operating companies — McNally Bharat, McLeod Russel and Eveready — raised loans from financiers to cover the losses at McNally. In turn, they pledged the shares of the three operating firms as collateral.

Moreover, Eveready and McLeod Russel directly lent to McNally by depleting their own reserves and surplus and stretching their own balance sheets. Financiers offloaded pledged share in the market when promoters failed to pay back. The promoters had a 44.11 per cent stake in Eveready at the end of March last year.

While a comprehensive group level restructuring has been in the works for more than a year, the Khaitans have decided that each company would seek a separate solution.

“Each company will individually chart their own course of journey,” a Khaitan family member said.

Accordingly, Eveready appears to be piggybacking the Burmans, who has myriad investments across sectors, to retain the company. Around 68 per cent of the residual stake the promoters is also pledged.

The company does not have a debt issue of its own. However, it had issued Rs 421.16 crore as inter corporate deposit which is outstanding as on March 31 this year.