The Hindu Business Line : Dunlop plans to raise $90 m through private placement

Kolkata March 19 The BIFR approval to the rights issue of Dunlop India has finally opened up an opportunity for the company to avail itself of long-term finance.

According to sources, the Ruia Group is planning to privately place 14.5 per cent of the promoter's stake in Dunlop India for raising $80-90 million through a mixture of loan and equity soon after the rights.

Company sources told Business Line that the private placement, if it comes through, would be a part of the Rs 550-crore revival plan of Dunlop.

It is learnt that the company was in active dialogue with two overseas banks for the said private placement. As per a Dunlop release, BIFR, in a set of rulings on March 16, has allowed the company to straightaway issue 2.7 crore shares of the company at Rs 10 each on rights basis by April 15.

The Ruia group currently holds 74.5 per cent controlling stake in the company through its Singapore based SPV Wealth Sea Pte and Manali Properties Ltd.

Wealth Sea had acquired DIL Rim and Wheels, the holding company of Dunlop, through an overseas acquisition in late 2005.

Interestingly, last week's BIFR ruling has created a unique situation whereby the proposed rights may coincide with the open offer.

While BIFR has reportedly directed the company to complete the rights issue by April 15, Dunlop had previously proposed an open offer to its shareholders between March 24 and April 12.

When contacted, a Dunlop official said that the company was still awaiting the final SEBI approval for the open offer.

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