Financial Daily from THE HINDU group of publications
Saturday, Jul 03, 2004
Financial Daily from THE HINDU group of publications Saturday, Jul 03, 2004 |
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Corporate
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Announcements Apollo Tyres to take up due diligence of Modi Rubber unit K.R. Srivats
New Delhi , July 2 THE Rs 2,300-crore Apollo Tyres Ltd (ATL) said on Friday that it would soon take up "technical, financial and commercial due diligence" of the tyre business of Modi Rubber Ltd (MRL). "We expect the due-diligence to be completed in a time span of 30 days. The due-diligence would be taken up shortly and would be done by ATL officials. This would help us put exact numbers on the table. After the due-diligence is completed, we would have formal talks with interested parties, including banks, creditors, financial institutions," Mr Sunam Sarkar, Chief (Strategy and Business Operations) and Member of the ATL Board, told Business Line here. ATL informed the Bombay Stock Exchange on Friday that the company plans to acquire the tyre business of Modi Rubber by way of block purchase of assets and transfer of specified liabilities relating to Modi Rubber's tyre business. This is, however, subject to the due-diligence, approval of settlement terms by banks, financial institutions, creditors, and other lenders of ModiRubber, and the approval of the rehabilitation scheme by BIFR, and other regulatory authorities as well as the approval by the board and members wherever applicable, of both Modi Rubber and Apollo Tyres. ATL had in the past (about two years back) undertaken a due-diligence of the Modi Rubber's tyre plant. The company has been in talks with the creditors of Modi Rubber to see if some breakthrough can be achieved for settling their dues. "A due diligence is required since more than two years have passed and we need to understand, say for example, the current realisable value of raw materials that are in the plant. The stock exchanges have been informed as a matter of abundant caution as our officials would now visit MRL's tyre facility for the due-diligence," Mr Sarkar said.
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