Eveready: How Giant Company Fell To Financial Headwinds

It is always the desire of shareholders that their investments in various companies listed on the stock exchange market would lead to a pay bonanza. However, such is not always the case as some investors have been forced to endure grinding years characterized with zero dividends and unknown future.

Such has been the fate of companies such as Uchumi, Sameer and Eveready East Africa which can only look at the past with nostalgia as they are currently trading with negative equity.

Brief History of Eveready East Africa 

The company was incepted in 1967, then known as Carbide Union Corporation. It changed its name to Eveready Kenya Limited in 1986. The company was listed on the Nairobi Stock Exchange in 2006 under the name Eveready East Africa.

Eveready was a giant player and dominated the Kenyan market with like a colossus. It wooed investors, consumers and suppliers in equal measure in the supply of Eveready dry cells. The logo imprinted on the batteries that depicted a cat and the number 9 figure was symbolic of the proverbial cat with nine lives only for things to take an abrupt turn.

The plunge of Eveready after fallout with Energizer 

Around 2014, the company closed down their dry cell manufacturing unit in Nakuru after it emerged that it was embroiled in a frosty relationship with Energizer International. According to Standard Media, the latter had a stake of only 10.03% but controlled 80% of Eveready’s finances.

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Energizer terminated their 50 year old contract as the chief supplier of Eveready in 2015 leaving the company off the balance. In what appears to be a bitter fallout, Energizer was also accused of changing the agreed terms of supply from open-based to cash-based without notifying its partner.

We had zero ownership and control of the Energizer brands. That posed a risk of how sustainable the business was and compromised our ability to grow,” said Jackson Mutua who was by then Eveready’s managing director.

The struggle to survive 

Over the years, Eveready has been stuck in a rut of years of losses and last paid dividends in 2017 after sale of their land in Nakuru. The firm has also been hit with a ‘Kodak moment’ after a massive change of consumers preference of dry batteries.

To rebrand itself, Eveready shifted focus to manufacture of car batteries under the Turbo brand. Additionally, it produces lighting products such as bulbs, lanterns and flashlights. It still produces dry cells of various sizes to be used by Kenyan households.

Current Financial Woes 

According to Business Daily, the current financial situation of Eveready puts it in negative equity. It has liabilities that are more than its assets by a value of Ksh 2.1 million. The troubled firm owes Ksh 33.7 million in short term loans and is also indebted to suppliers by a sum of Ksh 113 million.

To resuscitate Eveready, the Capital Markets Authority recommends  rehabilitative measures even as the company suggests a capital injection by investors.

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