"Dunlop India is out of the BIFR's purview as its net worth has turned positive and it has wiped out the entire accumulated losses that amounted to Rs 450 crore," Pawan Kumar Ruia, chairman, DIL, told reporters.
"The company has reserves of Rs 1,200 crore which has been achieved on the back of high turnover, increased production and a healthy response from the market."
The company, which was declared sick on December 31, 1997 under provisions of the Sick Industrial Companies (Special Provisions) Act, 1985, has informed the Bombay Stock Exchange that it has come out of the purview of the BIFR and has sought listing of its shares at the stock exchange.
The Madras High Court, which directed that Dunlop will not remain under the BIFR's purview, said in its order on December 19 that "from the audited balance sheet of Dunlop India as on March 31, 2007, it is clear that the company's net worth has become positive as it has wiped out the entire accumulated losses. BIFR cannot retain jurisdiction over the company."
This order was given on a writ petition by DIL challenging the validity of an auction by Container Corporation of India (Concor) in July last year, of machinery worth Rs 1.35 crore imported by DIL through Concor's yard in Chennai.
Dunlop India is now negotiating with a host of banks and financial institutions for repayment of its overseas debt of $90
million within a month and a half.
"Dunlop raised $90 million from a host of offshore hedge funds, led by UK-based Spinnakar Capital Group, for five years," Ruia said.
"Spinnakar Group has an option to acquire a 15 per cent stake in Dunlop from DIL Rim and Wheel Corporation Ltd (the Mauritius-based holding company of Dunlop), but if we repay the loan within a month and a half, then their stake option would drop to 7.5 per cent. We are hopeful of repaying the loan soon," he said.
The $90 million pure debt was raised at Libor (London inter-bank offer rate) plus 6.5 per cent, which worked out to 11.5 per cent.
The company had raised the funds to repay earlier loans, refurbishment and also meet its working capital requirements.
Separately, it had borrowed Rs 121 crore at a rate of 13 per cent from Deutsche Bank in the domestic market by mortgaging its Mumbai property.
Dunlop has also transferred its non-core real estate worth Rs 320 crore to four subsidiaries - Dunlop Properties Private Ltd, Dunlop Infrastructure Private Ltd, Dunlop Estates and Bhartiya Hotels.
Ruia said the company plans to scale up tyre manufacturing capacity at its Shahagunj facility in Hooghly district (West Bengal) to 130 tonnes a day by the end of the next fiscal.
Dunlop India currently manufactures 50 tonnes of tyres a day at Shahagunj and 30 tonnes a day at Ambattur, near Chennai.
