Group Firms Extend Lease Pact For Birla Tyres

The consortium of B K Birla group companies, to whom the once-ailing Birla Tyres had been entrusted, has decided to extend the lease arrangement by another year to March 1998 on an increased consideration of Rs 42 crore per annum.

The consortium of four group associates, which has taken the tyre division on lease, has agreed to operate the tyre division on a payment which has now been increased by Rs 3 crore as against the earlier arrangement at Rs 39 crore per annum.

The four group companies are Century Textiles and Industries, Jayashree Tea, Bharat General and Textiles Industries and Kesoram Industries At a meeting with the consortium partners recently, it was decided that the lease which was to expire in the financial year 1996-97, should be extended by another year to March 31, 1998. Birla Tyres will become part of Kesoram Industries from April 1998.

 

Kesoram Industries had already approved the decision to extend the lease period subject to approval of the other three consortium partners.

Birla Tyres, the tyre division of the Rs 607-crore Kesoram Industries, was hived off in early 1994 as it was responsible for Kesoram Industries declaring a loss of Rs 24 crore in 1992-93.

The management decided to lease the ailing tyre division to group companies which can support the unit better on the advice of financial institutions and the company's banker.

The group companies had formed an