Calcutta, June 22: RP Goenka's Ceat Tyres and Raunaq Singh's Apollo Tyres have shown interest in a joint venture with the Tyre Corporation of India Ltd, the ailing public sector unit. Ceat and Apollo sent in feelers in response to an advertisement published on behalf of the Tyre Corporation management recently in major dailies by SBI Capital Markets Ltd.

Sources in Tyre Corporation's workers' union told The Financial Express that although Ceat and Apollo have expressed interest, they are yet to send in any bid to SBI Capital Markets Ltd, the operating agency appointed by the Board for Industrial & Financial Reconstruction for Tyre Corporation's rescue.

Tyre Corporation has three units--an industrial rubber division at Tangra in Calcutta, a tyre division in Kankinara, and a reclaimed rubber plant at Kalyani in North 24 Parganas.

The union government had invested Rs 103 crore in modernising the Kankinara unit before the company was referred to BIFR in 1992. The total cost of the project was Rs 125.80 crore.

The Kankinara unit, which used to roll out the once-famous Inchek brand of tyres, is now idle in the absence of working capital. However, it has booked orders from Apollo, Ceat and JK Tyres. The annual capacity of this unit is 6.05 lakh automobile tyres, 1.23 lakh tubes and 0.89 lakh flaps.

According to the proposal in the advertisement, "the joint venture partner is expected to take up an equity stake (the percentage of the equity to be taken up to be indicated by the bidder) and bring in the necessary funds, technology and other support for turnaround of TCIL."

Foreign and Indian business groups and non-resident Indians having a profitable record and a minimum net worth of Rs 40 crore, along with three years of manufacturing experience, are eligible to apply. However, the joint venture participation is subject to approval by the BIFR.

The government has also spent Rs 4 crore to renovate the Tangra unit, which manufactures ply and braided hoses, fan and V-belts, transmission and conveyor belts, and cycle and moped tyres. This unit has been closed from August 1, 1993. However, fresh trial runs began from May 7, 1997, and commercial production is expected from June 25. Tyre Corporation has a workforce of 2,100, of which 630 are in the Tangra unit. At one time, the Union government had wanted to set up a joint venture with an outsider exclusively for this unit.

But the BIFR turned down this proposal, as it was for only one division. It advised the government to register this division as a separate company and then apply for private participation.In the meantime, the company's employees' congress has appealed to the government to accept the revival scheme submitted by the workers. The cost of this package is Rs 14.36 crore.

Copyright © 1997 Indian Express Newspapers (Bombay) Ltd.