The Hindu Business Line : Ruia Group may strike deal for Rs 350-cr loan for Dunlop

, The Kolkata-based Ruia Group is close to firming up long-term finance of around Rs 350 crore from a consortium of foreign funding agencies to meet the liabilities and modernisation costs of Dunlop India.

The consortium will also be allowed to pick up a minority stake in Dunlop India in exchange for the loan finance.

While it is not clear whether Dunlop will issue fresh equity to the consortium, sources said that the stake could be in the region of 5 to 10 per cent.

Though they did not mention the amount of loan finance now being raised, the sources said that it would take care of the entire Rs 350-crore requirement of Dunlop India.

Settlement deal

Expecting to close the deal within a week, the company aims to settle the liabilities of its secured creditors including the fixed deposit holders latest by April 10.

And, also to be settled shortly will be the Rs 150-crore book liability with banks and financial institutions at a total consideration of Rs 40 crore. While a settlement deal is already struck with Bank of TokyoMitsubishi, others waiting for settlement are Tamil Nadu Industrial Development Corporation, Karnataka State Industrial Development Corporation, Syndicate Bank and Bank of Madura.

Bengal option

It may be mentioned that Dunlop had previously applied for loan finance from West Bengal Industrial Development Corporation.

Though WBIDC had shown interest, in view of the latest development, Dunlop, it is learnt, may not exercise the option.

On the operational front, the company is expecting the wage agreement at Ambattur facility in Tamil Nadu to be struck shortly. The same for Sahagunj facility in West Bengal, however, may be delayed.

Meanwhile, the West Bengal Commerce and Industry Minister, Mr Nirupam Sen, said that the State Government is working out a fiscal incentive package for the company and would pave way for its reopening at the earliest.