Starting the process of outright sale of the ailing Tyre Corporation of India (TCIL), the disinvestment department has invited expression of interest from entities willing to buy the company. In a public notice, the Department of Disinvestment (DoD) has asked for global expressions of interest (EoIs) for buying 100 per cent stake in TCIL. The last date for submission of EoI is August 13.
DoD has appointed SBI Capital Markets as advisor to manage the sale process. West Bengal-based TCIL, wholly-owned by the Union government, makes automotive tyres and was incorporated in 1984. Its paid-up capital was Rs 29.63 crore as on March 31, 2011. TCIL was declared a sick company in 1992 and was then referred to the Board for Industrial and Financial Reconstruction.
The proposal for revival of the company was considered by the Cabinet in November, 2008 and it approved the financial restructuring of TCIL through cleaning of the balance sheet and subsequent disinvestment of the company.
The financial sanctions for waiver of interest on government loans, unpaid guarantee fee and reduction of duty (enhanced), amounting to Rs 816 crore, have been issued to the company.
Since 2002, the company has not been manufacturing its own brand of tyres.
It has been doing 100 per cent jobbing work for companies such as CEAT and Birla Tyres due to the shortage of working capital. The Department of Heavy Industry in July 2011 had prepared a proposal for a complete sell-out of TCIL, as it has been reporting losses for the last several years. The outright sale of TCIL would help the government in inching towards meeting the Rs 30,000 crore disinvestment target set for the current fiscal. The government is yet to launch a PSU stake sale this fiscal. It has initiated the process of roadshows for Rashtriya Ispat Nigam Ltd (RINL) and the initial public offering (IPO) is likely to hit the capital market within this month. The DoD aims to raise Rs 2,500 crore from stake dilution in the company.