Troubled tyremaker Dunlop, acquired by the Kolkata-based Ruias in 2005, will start trading on the bourses once again after a gap of seven years, as its promoters plan to revive the brand and initiate expansion.
The company re-opened its Shahagunj plant in West Bengal on Wednesday, after production was suspended on November 30 last year, following a section of workers opposing the management's proposal of a temporary shutdown.
Pawan Kumar Ruia, chairman, Ruia Group, said: “The suspension of trading on Dunlop shares will be lifted in the next 10-15 days. About 45 million shares of the company have been allowed to be traded from the total of 72 million. We will also gradually increase the output at both our plants in Chennai and Kolkata by three times over two-to-three years.”
Ruia also said Falcon Tyres, again owned by the Ruias, which makes two-wheeler and three-wheeler tyres, will see investment towards expanding its production capacity. About Rs 300 crore will be invested to augment capacity from 250,000 tyres to 1.7 million tyres over five to six months. The company has tied up with Central Bank of India, which has granted it Rs 100 crore worth of term loan, while another Rs 100 crore will be sourced from other banks. An additional Rs 100 crore is being invested in the form of equity by the company.
The promoters will offload stake by more than 10 per cent in Falcon as private placements, bringing it below 75 per cent from the present 86 per cent.
A 50 Mw coal-based power plant is also planned by Dunlop in Kolkata, which will come up at a minimum cost of Rs 250 crore and built over the next 12-18 months. The power, however, will not be restricted for just captive use; the extra generated will be sold.
Dunlop manufactures tyres for buses, trucks, tractors and off-the-road vehicles. The management is looking to increase daily production from 40 tonnes to 130 tonnes in both the plants. The expansion will be for cross-ply tyres and not radials, an area where the company is not present. The brand will also look at entering the segment after two or three years.
