Never miss a great news story!
Get instant notifications from Economic Times
AllowNot now


You can switch off notifications anytime using browser settings.
11,937.5016.0
Stock Analysis, IPO, Mutual Funds, Bonds & More

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.

, ET Bureau|
Updated: Jun 27, 2014, 08.32 AM IST
0Comments
Basant Kumar Birla-promoted Kesoram Industries is mulling a re-organisation plan that may even include selling its profitable tyre division to reduce its high debt.

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”.
Comments
Add Your Comments
Commenting feature is disabled in your country/region.
Download The Economic Times Business News App for the Latest News in Business, Sensex, Stock Market Updates & More.

Other useful Links


Follow us on


Download et app


Copyright © 2019 Bennett, Coleman & Co. Ltd. All rights reserved. For reprint rights: Times Syndication Service