Dalmia Bharat edges closer to acquiring Birla Tyres with the objective of revitalizing Birla Tyres Ltd, a BK Birla group company.
Justification
Following the green signal from the creditors of Birla Tyres Ltd upon Dalmia’s resolution plan for the acquisition of Birla Tyres for partial repayment of Birla Tyres’s bank loans worth INR 1100 crores, Dalmia is set to acquire Birla Tyres.
Birla Tyres Ltd which has been in the commercial & two-wheeler tyre manufacturing business for 25 years, a spin-off from Kesoram Industries in 2019, is undergoing Insolvency proceedings at the National Company Law Tribunal (NCLT).
Over 75% of the company’s creditors, led by Axis Bank, endorsed the plan, meeting the two-thirds majority requirement under the Insolvency and Bankruptcy Code.
The fresh resolution of Dalmia proposes to repay around INR 300 crore of Birla Tyres' debt, wherein the initial to repay 1/10 of the company’s debt was declined.
Dalmia has roped in Himandri Specialty Chemicals as a strategic partner in the deal.
The target earlier had a collaboration with Italian tyre manufacturer Pirelli.
