Modis had earlier offered to buy back institutions' holding in Modi Rubber at Rs 58 a share. Institutions cumulatively hold around 44 per cent in the firm.

When contacted, UTI officials refused to comment on the subject.

Of the total shareholding, the trust's flagship US-64 alone accounts for nearly 13 per cent or 32.17 lakh shares as on June 30, 1998. In the case of trust selling shares at Rs 70 apiece, US-64 will be richer by Rs 22.52 crore. However, the price at which UTI bought the stake in the company is not known.

Unit Trust holds over 42 lakh shares of the ailing tyre company. If UTI sells its stake at Rs 70 a share, this will be at a premium of 180 per cent to the currentmarket price of Rs 25 of Modi Rubber on the Mumbai Stock Exchange.

Financial institutions had formed a committee to decide on the price at which their holdings were to be offloaded in Modi Rubber. The committee apparently reached a deadlock with the promoters, as it was not willing to bring down the sale price from Rs 123 a share.

The other institutional holding in the company includes IDBI (0.27 per cent), IFCI (5.88 per cent), LIC (10.8 per cent) and GIC (10.5 per cent). Further, nationalised banks hold 0.44 per cent in the company.

Modis are planning a major restructuring of Modi Rubber. The company has already completed the organisational restructuring and currently working on the financial part.

The company's losses during the first quarter of the current fiscal has come down to Rs 46 lakh from Rs 9.64 crore in the corresponding period in 1997-98.

Modi Rubber's sales have, however, declined to Rs 196 crore in the first quarter from Rs 216 crore in the same period last fiscal. It is believedthat the slump in the sales has been caused by one of the units, which has been shut down.

The company's expenditure has declined from Rs 206 crore to Rs 188 crore and interest outgo has come down marginally to Rs 10 crore from Rs 11 crore.

Modi Rubber has a technical collaboration with Continental AG of Germany, which has forayed into the retreading market with the primary tyre market yet to pick up.