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FIs' involvement in MRL offer `unlikely'

Our Bureau

NEW DELHI, July 2

THE financial institutions are unlikely to budge from their earlier stand and participate in the open offer made by the promoters of Modi Rubber Ltd (MRL).

Just a day before the close of the offer, Mr P.S. Subramanyam, Chairman of the Unit Trust of India (UTI), which is one of the largest shareholders in MRL, said: "As of now, there is no change in our stand and it is unlikely that we will participate in th e open offer. The IDBI Chairman has already said that the price and the terms and conditions made in the open offer are not in line with what was discussed with the Modis before the open offer was made."

Mr Subramanyam also said that the offer price was not what was discussed with the Modis earlier and the offer was not to acquire the entire 44 per cent holding, but for acquiring just 35 per cent stake. "The offer is for just 35 per cent, while the insti tutions have 44 per cent in the company. Institutions would have to proportionally reduce their holding if they participate in the offer, which we are not in favour of," he said.

Other issues like sale of certain assets by the Modis also have not come through.

With the offer closing tomorrow, it is unclear how the Modi brothers would be able to garner 35 per cent. According to sources, the promoters have not been able to muscle too much support from other shareholders.

Dr B.K. Modi, Managing Director of MRL, however, appeared confident of the open offer. Speaking to reporters on Saturday, he had even stated that the board of the tyre company would be reconstituted once the shareholding pattern changed after the open of fer.