We will continue to hold management control: Wheels India

The announcement comes at a time when its foreign partner offers to hike its stake through open offer

TVS Group company Wheels India today said it will continue to hold the management control. The announcement comes at a time when its foreign partner is planning to increase its stake through open offer, which will lead the foreign partner to have majority stake.

Meanwhile, the company today got board's approval to raise Rs 100 crore through a public issue. The company may dilute around 5% through the issue.

Srivats Ram, managing director, Wheels India said the fund raising is to meet the fresh capital requirements and will also help the company to meet the deadline of Sebi for listed companies to have at least 25% equity held by non-promoters.

The approval is for the public issue of equity capital (including premium) up to Rs 100 crore.

"We want to improve our debt equity ratio and bring working capital to the company, for which we decided for public issue," said Ram.

At present, company's debt is around Rs 400 crore.

On Titan Europe Plc, which is currently a 35.91% shareholder in Wheels India, has informed the company that by virtue of an international transaction involving the acquisition of Titan Europe Plc by Titan International Inc it is required to make an open offer to the public shareholders of Wheels India, under the India Takeover Code.

On Thursday, Titan Europe Plc and Titan International Inc as Person Acting in Concert, said that is planning to acquire 14.38%. The acquisition will be through an open offer to acquire 14,19,405 shares constituing 14.38% of the fully diluted voting equity share capital of Wheels India from public shareholders.

Once the open offer completes successfully, the share holding of Titan Europe would go up to 50.29% in the company, while the Indian promoters, including TV Sundaram Iyengar & Sons Ltd, Sundaram Finance Ltd and Souther Roadways Ltd will hold the rest.

Ram said, post Wheels India's public issue current shareholding will be similar and fund raising via equity is to meet capital requirements and to meet the statutory requirements.

The fund raising could be QIP, IPP or other modes, which yet to be decided, he said.