Real estate prop for Dunlop

                                                                                         

Dunlop India has valued its real estate assets at over Rs 900 crore, paving the way for the company to come out of the Board of Industrial and Financial Reconstruction (BIFR).

Dunlop, which Pawan Kumar Ruia took over from the Chhabria family along with Falcon Tyres in late 2005, is under the BIFR.

Prolonged closures of its units at Sahagunj in Bengal and Ambattur in Tamil Nadu when the Chhabrias were at the helm created accumulated losses at Dunlop of Rs 410.8 crore at the end of the last financial year. This eroded its net worth which was a negative Rs 261 crore on March 31, 2006.

After the new valuation of the real estate assets gets reflected in Dunlop’s books, the net worth will turn positive, and the company will be out of the BIFR.

The valuation was carried out by NYSE-listed international real estate management firm Jones Lang LaSalle (JLL).

LaSalle valued Dunlop House in Worli, Mumbai at Rs 300 crore, the Ambattur factory near Chennai at Rs 500 crore and the Sahagunj plant in the Hooghly district of Bengal at Rs 100 crore.

However, the new management under Ruia is keen on carrying out a BIFR-approved revival package.

Dunlop chairman P.K. Ruia confirmed that JLL carried out the exercise, valuing the real estate assets at over Rs 900 crore.

Ruia said Dunlop has placed a Rs 600-crore package before the State Bank of India (SBI), the operating agency appointed by the BIFR for Dunlop.

“We are expecting BIFR to approve the scheme within the next three to four months,” Ruia told That.

After the BIFR scheme is approved, the company can bring the real estate assets on the balance sheet.

The asset revaluation exercise, however, did not consider the plant and machinery in Ambattur and Sahagunj.

At present, the Dunlop House in Mumbai having an area of 88,000 sq ft is mortgaged to lenders for loans of Rs 77 crore taken by the the company.

Ruia has till now procured Rs 200 crore to refurbish plant and machinery, pay off workers’ dues, settle secured creditors’ and government’s dues.

Both the units in Bengal and Tamil Nadu have now started operations and Dunlop tyres have hit the market.

This year, Dunlop is expecting a turnover of Rs 55-60 crore.
However, with production at a peak capacity projected for the whole of the next fiscal, Dunlop’s turnover could be in the range of Rs 1,000-1,300 crore, if tyre prices are buoyant.

The company is also expecting its shares to start trading on the Bombay Stock Exchange soon.

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Source: IndiaRealEstateblog http://www.indiarealestateblog.com/?p=1004">IndiaRealEstateblog>

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