Kesoram plans recast, may sell tyre unit to cut debt
In a recent communication to the stock exchanges, the company said that it is exploring options for reorganising and realigning its existing business.
This is part of its plan to restructure its business. In a recent communication to the stock exchanges, the company said that it is exploring options for reorganising and realigning its existing business.
The release stated that to evaluate the reorganisation of the company’s business, the company has constituted a core committee of three directors, comprising two independent directors.
Gautam Ganguli, company secretary and compliance officer of Kesoram Industries told ET, “the company has constituted a committee today for reorganisation of the company. On the basis of the report submitted by the committee, the board will take decision.”
“The committee will consider on all aspects from capitalisation of some business verticals to steps to pare down its debt level,” Ganguli added.The company has outstanding debt of Rs 4,908 crore in FY14 and it has posted losses for the last four consecutive years in the last four year, according to the Bloomberg data.
Analysts say the decision to sell its tyre business seems to be sensible and lucrative one given the fact that in the recent rally the fortunes of tyre companies have changed considerably with their share prices zooming up in the range of 20-113%.
An analyst said, “Tyre business seems to be crown jewel for the company presently as tyre stocks has been re-rated on possibility of the demand level. Given the fact that the company has nearly 15% market share in medium and heavy commercial market, it can command better valuation from potential bidders. This could be critical to pare down its debt levels”.