Ruia group charts new episode for Dunlop

Kolkata, Oct 16 (UNI) After reopening Dunlop's Ambattur unit on August 27, the Ruia group would reopen the Sahagunj unit on October 31.

The Sahagunj factory would initially produce cross-ply tyres, including off-the-road (OTR) tyres and industrial products.

Kolkata based Ruia Group, which had taken over the majority stake of the Dunlop India Limited from the Jumbo Group in 2005, has already spent Rs 150 crore from its internal accruals towards modernisation of both of its facilities and meeting past liabilities.

However, the Ruia group's proposed stake dilution in Jessop and Company is likely to be delayed because the group is expecting a better valuation from the foreign institutional investors.

Once the group arrives at the right valuation for the shares it would sell 25 crore shares, according to Mr Ruia. The foreign investors are evaluating on the basis of future earning method while the Ruia group is valued on the basis of real assets owned by the company at around Rs 300-500 crore.

The Ruia group bought the public sector wagon and engineering company which was put on block by the government three years ago.

Mr Ruia said he would not divest below Rs 30 for each share of Re 1. The promoters currently hold 94 per cent stake which would have to be brought down to 75 per cent post the public issue. The dilution of stake would enable the company to meet SEBI guidelines for listing in NSE and BSE.

Meanwhile, the Ruia group is also planning a shipbuilding and repairing facility near Haldia and had applied for 2,000 acres for the shipbuilding project from the West Bengal Government, Mr Ruia said.

However, the fate of the other project, which comprises a re-rolling facility and a power plant, looks uncertain, since not more than 1,500 acres are available, he said.

He said the entire project entailed an investment of about Rs.

3,300 crore, of which the ship-repairing part comprised about Rs.

2,200 crore. The investment will be met through a debt of Rs. 1,760 crore and internal accruals of about Rs. 210 crore.

A public issue of Rs 220 crore was also proposed for the new company which would be a subsidiary of Jessop. The West Bengal Industrial Development Corporation (WBIDC) would be the joint venture partner with an equity investment of Rs 11 crore.

The Ruia group, which owns Kamlapur Sugar in Uttar Pradesh, was also planning to increase the crushing capacity from 4,500 tonnes to 7,500 tonnes a day by 2006-07. This would be done through brownfield expansion and acquisition. A sum of about Rs. 150 crore had been set aside for this.

UNI TJP KK RN/DB1650