Dunlop India is planning to sell part of its excess land in Bengal and Tamil Nadu to prop up the troubled tyre maker’s shaky balancesheet.
The company has spun off the excess land at Sahagunj in Bengal and Ambattur near Chennai into separate subsidiaries. It plans to sell a stake in the two subsidiaries to strategic partners.
Dunlop wants to build infotech SEZs in the two states.
“Dunlop is actively looking for partners to develop the areas for IT SEZs. We are ready to offload 50 per cent in the two companies,” Dunlop chairman Pawan Ruia told The Telegraph.
The company owns over 58.52 acres at Athipattu village in Ambattur in addition to the 30-acre factory premises.
That area has become a hotbed of the IT industry with a number of domestic and multinational IT majors setting up shop there.
The company hopes to rake in $70 million (about Rs 280 crore) by offloading 50 per cent stake in the subsidiary that holds the property at Ambattur.
“If we can do this, our working capital requirements of Rs 200 crore will be taken care of. Dunlop can also retire some of the high-cost loans,” Ruia said.
The company is also hoping to find a partner for the proposed IT SEZ at Sahagunj where 178.8 acres of excess land was transferred to a subsidiary company out of the total 239 acres. The Dunlop management is finding it hard to run operations because of shortage of funds. It is also straddled with high-cost loans worth Rs 130 crore.
While real estate developers think it could be hard to get the same sort of valuation for the land at Sahagunj, Ruia is hopeful.
“It doesn’t take more than 90 minutes from the airport to the plant site,” he said.
The Ambattur deal is likely to take place before the Sahagunj one. Dunlop has sought clearance from both the Tamil Nadu and Bengal governments to establish the IT SEZs.
Dunlop had hived off idle properties to wholly owned subsidiaries in the last quarter of 2006-07. Instead of paying cash, these companies had issued shares of equivalent amount to Dunlop.
The financial engineering enabled the company to report a positive networth. Last month, it was able to come out of the BIFR’s ambit after a Chennai High Court ruling.
1 comment:
Thank you. I just wanted to know where to ship it since I know now to keep producing it
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