Date:04/12/2005 URL: http://www.thehindu.com/2005/12/04/stories/2005120404451300.htm

Back

Business

P. K. Ruia buys three Chhabria cos.

Special Correspondent

Efforts on to re-start Dunlop unit in Ambattur by June

Deal valued at Rs. 200 cr.
To invest Rs. 100-150 cr. to revive Dunlop

Sahagunj unit workforce to be absorbed in a phased manner

— Photo: Arunangsu Roy Chowdhury

ACQUISITION SPREE: Pankaj Kumar Ruia made the announcement of the acquisition of Dunlop at a press conference in Kolkata on Saturday.

KOLKATA: Pawan Kumar Ruia, Chairman of Jessop & Co Ltd., on Saturday announced the sealing of a block-deal to get three former M. R. Chhabria group companies — Dunlop India Ltd, Falcon Tyres and India Rubber Tyre Products Ltd — for about Rs. 200 crore.

Addressing a press conference here a few hours after signing the deal in Singapore, he said he proposed to go to the Sahagunj unit in West Bengal on Sunday and the Ambattur unit in Chennai next week.

The Ruia group planned to invest Rs. 100- 150 crore to revive Dunlop India.

Sahagunj unit

Mr. Ruia said with the completion of negotiations between the labour and the former management, the Chennai unit was in an advanced stage of refurbishment and he planned to reopen the unit employing 1,100 persons by June 2006.

The Sahagunj unit employing 2,700 persons was in a difficult shape needing technological inputs, besides forging of a deal with workers. "While the Ambattur unit's manpower size is okay, the Sahagunj workforce can only be absorbed in a phased manner over next three years," he said adding that some sacrifices might also be needed by way of settlement of workers' dues.

He set himself a target of re-starting the two plants within 2006 and turning around the once blue-chip company, within 18 months of resumption of operations.

The Jumbo Group's divestment in the rubber business was in line with its decision to exit non-strategic businesses, said Prakash Nene, Director, Jumbo World Holdings Ltd. He said Ambit Finance acted as advisors to the Jumbo Group in this transaction. The closing of the deal marked the end of a seven-month long negotiation process, Mr. Ruia said.

With the deal part now over, for reopening of the units, DIL's operating agency, State Bank of India and the Ruia group will sit together to work out a package which will be submitted to the BIFR/ AAIFR.

Simultaneously, the Ruias will discuss with banks to whom Dunlop India owes Rs. 130 crore and also the workers' unions for settlement of their dues.