Onkar S Kanwar-controlled Apollo Tyres has pulled out of a joint venture with Michelin by selling its 49 per cent equity to the French company for an estimated $10 million (Rs 43 crore).

Sources close to the deal said the payment was based on "fair" book value and Apollo was getting back more or less what it had invested in the venture.

This is the second instance of an Indian joint venture involving Michelin falling apart. In 1995, it had forged a venture with Chennai-based MRF for manufacturing aeronautic tyres. The joint venture failed to take off after the partners failed to agree on Michelin increasing its equity from 5 per cent to 26 per cent.

Michelin Apollo Tyres was set up two years ago to manufacture truck and bus radial tyres. Its manufacturing plant, that was coming up in Ranjangaon near Pune, was scheduled to start production by the end of this financial year.

The joint venture was importing radial tyres from China and selling under both Apollo and Michelin brands. It had almost 30 dealers across the country, each believed to have invested Rs 30-50 lakh (Rs 3-5 million) in exclusive state-of-art outlets.

A joint press release from the two companies said the Ranjangaon project had been put on hold because "radialisation" of trucks and buses in the country was not happening at the anticipated rate.