BK Birla flagship Kesoram Industries is planning to hive off manufacturing facility at Haridwar as part of its tyre business restructuring amid speculations that Apollo Tyres and MRF are in race to acquire the plant.
A committee of directors, which was constituted by the company's board last year to look for options to reorganise and realign company's existing businesses, has recommended the move.
"The committee has recommended that the board consider reorganisation of the company's tyre business through transfer of the business's tyre manufacturing facility at Haridwar into a subsidiary," Kesoram Industries said in a filing to the BSE.
According to reports, Apollo Tyres and MRF Ltd are in the fray to acquire Kesoram Industries' tyre factory located at Haridwar in Uttarakhand.
When contacted a Apollo Tyres spokesperson said: "We do not comment on market speculation."
Chennai-based MRF Tyres declined to comment.
Kesoram Industries said the committee also noted the "imperatives to embark upon monetising some of its assets with a view to significantly reducing its debt burden. The broad contours of such monetisation will now be framed and implemented".
It further said that the committee, upon deliberating several options, was of view that the company should continue in all businesses that it was presently engaged in -- tyres, cement, and rayon.
Indeed these businesses required further strengthening to enhance their efficiencies, it added.
The company had constituted the committee on June 26, 2014.
For the second quarter ended September 30, 2014, the company's tyre business revenues had declined to Rs 669.31 crore, compared to Rs 764.67 crore in the same period of corresponding fiscal.
The tyre business had also reported a net loss of Rs 132.25 crore for the second quarter, as against a net profit of Rs 10.53 crore in the same period of previous fiscal.
Kesoram Industries shares were trading at Rs 131.75 apiece on the BSE, down 4.94 per cent from its previous close.
