Ruia Group Interested In Rs 500 Cr Car Radial Joint Venture

According to the sources, the Ruia Group is at a very advanced level of discussion for deciding on a foreign technology partner so that a proposed joint venture plant can be established. This proposed JV plant will manufacture New Cars radial tyres under the Dunlop brand, said Pawan K Ruia, Group Chairman. Mr. Ruia stated that they are in discussion with a technology partner for radial technology. Also, that partnership would not be confined to just technology.

Ruia further commented that equity participation by the joint venture partner can be of the equal partnership. Within a month, a decision upon the modalities will be taken. The new unit is also speculated to produce truck radial tyres. For the entities that may invest in a new venture, Mr. Ruia stated that the brand would be Dunlop but it has not yet been decided that which companies will become a part of this venture. He further added that the rights issue of Falcon Tyres may be introduced probably during the time period of 2011-12 once it gets the approval from the government for FDI. Both Falcon Tyres and Dunlop are counted among the two listed entities of the Ruia Group. The Dunlop brand manufactures OTR tyres while Falcon manufactures tyres for two as well as three-wheelers. Ruia said that they require funds for the expansion project of Falcon. He further said that a rights issue will be the preferred option. If the approval for the FDI gets delayed any more then the Ruia Group may pick up a stake through a domestic entity.

Earlier, Ruia had stated that the proceeds from the planned rights issue of the will be spent in a two wheeler tyre project of Rs 550 crore in the state of Uttaranchal. The plant is said to provide two-wheeler tyres especially to the Hero Honda company which gave the land for this project. Ruia was also quoted saying that he will carry on his effort of purchasing small, troubled and family run automobile component-makers in Europe which supplied to global auto giants.