JK Tyre completes Rs 2,195-cr buyout of Cavendish
JK Tyre & Industries has completed the Rs 2,195-crore buyout of BK Birla flagship firm Kesoram Industries' tyre manufacturing plant at Haridwar, thus adding 100 lakh tyres per annum capacity and enabling the firm to enter the high-growth two- and three-wheeler tyre segment.
JK Tyre and JK Asia Pacific (S) Pte Ltd, a wholly-owned subsidiary of JK Tyre, have completed acquisition of Cavendish Industries Ltd (CIL), a unit of Kesoram Industries.
"With the acquisition of Cavendish Industries, we have further strengthened our position in the truck and bus radial segment. It has also given us entry into two- and three-wheeler vertical," JK Tyre & Industries Chairman and MD Raghupati Singhania told reporters here.
The acquisition is in line with strategic vision of JK Tyre to become one of the leading tyre companies of the world with a well-rounded portfolio, he added. According to Singhania, the acquisition has been funded by a combination of internal accruals and debt.
"Of the total enterprise value of Rs 2,195 crore, Rs 700 crore is the equity and the rest Rs 1,495 crore is debt," he added. Riding on the acquisition, the company eyes a turnover of Rs 10,000 crore from the domestic operations in the current fiscal.
"Numbers for the last fiscal are not out yet, but what I can say is we expect around Rs 7,800 crore from domestic operations and going ahead, we are looking to close the current fiscal at Rs 10,000 crore," Singhania predicted.
On the Haridwar plant, Singhania said production will begin at the facility in the next 15 days.
He, however added that the company would have to take a "deep look" at the manpower at the plant, which currently stands at close to 5,000. "We will have to take a deeper look at it. We are trying for optimal manforce for productivity," Singhania said, without giving further details.