Financial Daily from THE HINDU group of publications
Friday, Aug 29, 2003
Financial Daily from THE HINDU group of publications Friday, Aug 29, 2003 |
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Corporate
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Performance Industry & Economy - Disinvestment Govt not keen on divesting equity in Tyre Corpn — Prefers conversion into joint venture Badal Sanyal
Kolkata , Aug. 28 ENCOURAGED by the financial performance of the State-owned Tyre Corporation of India Ltd (TCIL) during the first quarter of the current fiscal, the Union Ministry of Heavy Industries, the administrative Ministry of the ailing tyre company, is reportedly examining afresh the option of disinvesting the Government's controlling equity stake in the company in favour of a private tyre company. Informed official sources indicate that the Ministry is unwilling to disinvest the Government's entire equity stake in TCIL because such a move is time consuming to attract private promoters' participation. In fact, the Ministry prefers to restructure the company's paid-up capital, amounting to Rs 93 crore, to accommodate private investment in TCIL. In other words, the Ministry wants to convert TCIL into a joint venture company. Though a rehabilitation package for TCIL is yet to be finalised by the Board for Industrial and Financial Reconstruction (BIFR), the company has been able to perform well during the accounting year ended March 2003 and also in the first quarter of the current fiscal. The company is only doing a conversion job for other leading tyre companies instead of making its own "Inchek" brand tyre. According to a TCIL source, the company produced about 81,000 pieces of truck tyres during the April-June quarter in the current fiscal as against 48,000 truck tyres during the same quarter last year. Of the total conversion job done, about 50 per cent of tyres was for Apollo Tyres, about 30 per cent for J.K. Tyres and the balance 20 per cent for Birla Tyres. The monthly average operating profit of the company from the conversion job improved to the level of Rs 1.8 crore. TCIL produced a total of 2,73 000 tyres (12,914 tonnes in weight) in 2002-03 against 1,78,000 tyres (9,961 tonnes) in 2001-02, while it earned an operating profit of Rs 4.14 crore against a loss of Rs 7.8 lakh in 2001-02. However, the company has remained in the red considering the company's accumulated loss of about Rs 117 crore.
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