As Dunlop India resumed trading after two weeks, the shares of the ailing tyre maker rose 19.92 per cent to Rs 11.68 on the Bombay Stock Exchange after promoter Pawan Ruia Group’s plan to convert the company’s outstanding loan of around Rs 60 crore into equity.
Trading was stopped since March 29 following confusion over a winding up case in the Calcutta High court. The company got permission for resuming trading after the matter was cleared by it.
It had informed bourses yesterday that it would convene an extraordinary general meeting on April 28 to seek shareholder approval to allot 50 million shares of Rs 10 each at Rs 12 on a preferential basis, subjected to approval mandated by the orders of the court. Post-allotment, the Ruia group’s stake in Dunlop will come down from 65.29 per cent to 38.53 per cent.
The proposed allottees are Suncap Commodities Ltd (17.5 million shares), Regus Impex Private Ltd (17.5 million shares) and Salputri Commerce Private Ltd (15 million shares).
“The loan was taken for working capital requirements and the allotment to these entities would help in better restructuring of the company. The purpose is to make the balance-sheet of the company look healthier,” Pawan Kumar Ruia, chairman of the Ruia Group said.
On March 29, Dunlop India moved the division bench of the Calcutta High court after judge Sanjib Banerjee passed an interim order to appoint a provisional liquidator over Dunlop assets following an application from Madura Coats. The provisional liquidator, later the division bench of the court said, would work as a special officer and make an inventory of the assets at the Sahagunj factory.
Also, the tyre maker has been fighting a winding up petition from unsecured creditors in the Calcutta High Court. The petition seeking the liquidation of the company was launched by a Kerala-based partnership firm EV Mathai and Sons, and was later joined by 11 unsecured creditors. The company officials said most of these creditors used to supply raw materials (rubber) to Dunlop.
Operations at both Sahagunj (West Bengal) and Ambattur (Tamil Nadu) plants of the company are suspended.
