BK Birla group’s diversified outfit Kesoram Industries plans to reorganise its tyre business through transfer of the Hardwar manufacturing plant to a separate subsidiary as it looks to monetise the asset or strike a joint-venture deal with another tyre maker to cut debt.
A source said that Kesoram’s management thinks the monetisation of the loss-making Hardwar facility is one of the best options to bring the company to black.
“The company’s intention to give a separate identity to the Hardwar unit is in tune with its plan to monetise the asset. It will be exploring all sorts of possibilities — selling it out to another tyre maker or striking a joint-venture deal to bring in fresh equity” he told FE on the condition of anonymity.
Significantly, Kesoram is in talks with Apollo Tyres. A promoter-to-promoter level discussion was scheduled on Monday in New Delhi. “This is the first time the promoters of Kesoram and Apollo Tyres are expected to meet. They are likely to discuss ways of monetising the plant,” said the person cited above.
“If Kesoram can get Rs 2,000-2,500 crore from monetising the Hardwar plant, it would be in a better position to rehabilitate” said the sources.
Reportedly, another leading tyre maker, MRF, is also in race to acquire the plant. However, the person cited above said there were no formal discussions between the Kesoram and MRF managements so far.
When contacted Kesoram’s company secretary Gautam Ganguli said the plan to hive off the Haridwar facility was “not necessarily” to monetise the asset and he was not aware of any meeting of the company’s promoters with the promoters of Apollo Tyres.