Sbi Cap To Suggest Partner For Tyre Corp Venture

The government, in compliance with the Board for Industrial and Financial Reconstruction (BIFR) order to submit a revised rehabilitation bill, has appointed SBI Capital Markets to recommend proposals from Indian and foreign partners for a joint venture participation in Tyre Corporation of India Ltd (TCI).

The government is likely to approach the Board for Industrial and Financial Reconstruction for extending the date of submitting the revised proposal as it will invite biddings for the TCI joint venture till June 19.

The joint venture partner is expected to pick up an equity stake in TCI's 7.5 lakh shares at Rs 1000 per share, aggregating Rs 75 crore, and also bring in the necessary funds, technology and other support for a turnaround.

 

The BIFR, in a hearing last month, had rejected the government's conditional draft rehabilitation package for TCI and asked for a revised rehab proposal to be submitted to the Industrial Development Bank of India (IDBI), the operating agency, by June 25, 1997.

The government, it now seems, will be able to complete the formalities and submit the fresh proposal only in August. The next BIFR hearing has been fixed on 21 July, 1997.

In a parallel development, a three-member forum nominated from TCI's 13 unions, including the officer's union, will soon place an alternative proposal to the IDBI. Their proposal will suggest scrapping the funding of the Rs 17.97-crore braided hose project (BHP) at Tangra as the unit can be made viable by assembling an innovative productline from the other TCI units.

The government, while agreeing on all other reliefs and concessions in the BIFR package, had earlier insisted that funds for the BHP project be raised by selling surplus land.

This was rejected by the Board for Industrial and Financial Reconstruction.According to the original revival plan, the BHP unit at Tangra was to produce high-end products mainly for specific industrial use.

But the alternative proposal of the union aims at keeping the productline on the lower end.

TCI is a Calcutta-based government enterprise with a workforce of 2,100 employees.

It has three manufacturing units at Kankinara, Tangra and Kalyani. The Kankinara unit manufactures automotive tyres, tubes and flaps.

The Tangra complex, which houses an industrial rubber product (IRP) division, manufactures cycle and moped tyres, ply and braided hoses, fans, V-belts and transmission and conveyor belts.

The third unit at Kalyani manufactures tyres and reclaimed rubber products.

The government has already provided Rs 103.41 crore till March 31 for modernisation, upgradation and expansion of the Kankinara unit.