Dunlop India of the Pawan Ruia group has submitted a Rs 600 crore (Rs 6 billion) draft rehabilitation scheme to the Board for Industrial and Financial Reconstruction for the revival of the ailing outfit.
The chairman of Dunlop India, Pawan Ruia told reporters after the 79th annual general meeting that the company was hoping to get a BIFR nod on DRS soon. Besides, he indicated that after getting a toehold in domestic market, Dunlop may go for global acquisitions.
Commenting on the DRS, Ruia said that around 10 per cent of the DRS would be funded through equity and the rest would be borrowing.
"We are likely to raise the equity component through a rights issue or by way of promoters contribution," he added.
According to Dunlop India chairman, who took over the company from the Jumbo group last year, out of Rs 600 crore DRS, Rs 100 crore (Rs 1 billion) would be spent on capex.
The rest would be for working capital requirements, workers liability, refurbishing and for paying out to secured creditors. "We have already spent around Rs 170 crore (Rs 1.7 billion) under several heads since we took over. Now we shall pump in the rest," he added.
Ruia indicated that Dunlop could also look for a global acquisition later. "It is under our consideration," he said.
According to Ruia, the management was hoping to achieve a turnover of close to Rs 100 crore in the first year of operation after revival in 2006-07.
It is also contemplating a third plant to manufacture radial tyres.
The company currently has two plants in Ambattur near Chennai and Sahagaunj in West Bengal. The Sahagaunj plant is likely to start production from January 2007.
Commenting on the impending open offer of Dunlop, Ruia said that it would file the open offer document with Sebi by January 15.
"The open offer price for Dunlop will be Rs 10 and for Falcon Tyre will be Rs 148. We shall also pay the interest as per rule," he added.
In a parallel development, the Ruia group outfit Falcon Tyres may set up a second plant in Uttranchal.
Pawan Ruia said Hero Honda group has approached them for a tie up for two-wheeler tyre.
"They want to have buyback arrangement with Falcon. But we have not yet finalised anything about this," he said.
Falcon currently has a production capacity of 550,000 tyres at its plant in Chennai, which would go up to 750,000 following its current expansion plan in the Chennai unit.