Following the Calcutta High Court's stay order on an earlier order restraining Dunlop India Ltd from selling off its assets without prior
permission from the court, the unions of M R Chhabria-controlled tyre major have expressed reservations about the company's plans of dealing with its current cash crunch through the sale of its properties.
According to sources in the union, the total value of Dunlop's properties in India is around Rs 1,400 crore of which the company's property in Mumbai alone is worth around Rs 100 crore.
The Calcutta HCorder, which came on March 12, has proved to be a welcome relief for the company, allowing it an opportunity to stabilise its financial situation.However, the Dunlop unions are not as ecstatic about the latest court development as the management is.
"Many companies are selling their assets to generate funds. But in the case of Dunlop, we do not know whether the money coming in from the sales will be properly utilised for the upliftment of the company," said a union source.
He further said that if the money from the sales is not invested properly in Dunlop, the condition of the company will be far worse, as it would not even have the security of possessing saleable assts. Earlier, the unions had petitioned the
West Bengal government to prevent the company from selling off the Dunlop head office in central Calcutta to developers.
According to sources, a number of buyers have already shown a keen interest in purchasing those properties of the company that are up for sale.
The unions also feel that sale of assets will only be diminishing the total value of the company. Ashoke Pal of the CITU-affiliated union at Dunlop's Sahaganj unit said: "The best thing right now would be if the banks could give the company a conditional loan whereby the company can resume operations in its factory."
Earlier, in a meeting with the banks, the management pressed for an immediate infusion of Rs 110 crore through working capital term loan and bridge loan.
The unions have said that if the company is accepted by the Board for Industrial and Financial Reconstruction(BIFR) as a legitimate case, then the unions would also like to be a part of the package.
