The Hindu Business Line : RDB Ind gets New Tobacco ownership, plans revamp

After a decade-long litigation, RDB Industries, a BSE-listed company with primary interests in real estate development, has got the ownership of New Tobacco, once a Duncan Group outfit, at a final consideration of Rs 29.50 crore.

Mr Rajesh Kumar Jain, CEO of RDB Industries, real-estate division, confirmed to Business Line that the company has recently obtained the legal ownership of New Tobacco Ltd, which holds a cigarette manufacturing licence, a manufacturing facility in West Bengal and 7 brands including Regent, No 10 and Cool.

Realtors Dugar family had bought the assets of New Tobacco, which went into liquidation, in June 1995 through the Calcutta High Court administered auction sale at a price of Rs 23 crore as a sole bidder.

But a number of creditors, land lease holders and workers claimed their rights over the assets of the company in liquidation.

Sale certificates

The RDB management said the process of execution of sale certificates is still on after the court confirmed the sale of assets on April 19, 2006 following claims settlement.

The court directed the joint special officers to execute the necessary sale certificates for the plant and other properties in favour of RDB.

However, a litigation related to an unsecured loan of Rs 2 crore from Duncan Industries to New Tobacco remained under litigation.

The G.P. Goenka-controlled Duncan has reported complete erosion of its net worth.

The court administered a sale-off of New Tobacco's another plant in Andhra Pradesh to settle part of the workers' dues.

The operating unit on which ownership issue has been cleared by the court is located at Agarpara in West Bengal, having a land area of 28 acres and employing around 300 workers.

RDB so far had been running the cigarette factory under a lease agreement. In recent years, the factory produced between 130 million and 170 million sticks per annum, according to the RDB official.

Meanwhile, the promoters of RDB have pumped in Rs 25.55 crore through equity shares into the company, which is to be used for capacity expansion. It is installing an automatic packaging unit at the Agarpara unit.

RDB has also planned to demerge its real estate business through a court administered scheme, which is under preparation. In 2005-06, the real estate business contributed 50.51 per cent to the total revenue of Rs 27.56 crore.

More Stories on : Courts/Legal Issues | Real Estate & Construction

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