New Delhi: Dalmia Group firms have submitted a revised debt resolution plan for INR 1,100 crore of bank loans of Birla Tyres, which is undergoing insolvency resolution, according to people in the know.
A person familiar with the new plan told ET that group companies of Dalmia Bharat have offered to repay about INR 300 crore of the outstanding loans of Birla Tyres. This is said to be three times their original offer to creditors. Birla Tyres competes in the commercial vehicle and two-wheeler tyres segments.
The new offer has been put to vote and a creditor group – comprising 11 banks and financial institutions – is expected to convey its decision by Tuesday.
Birla Tyres’ resolution professional Pratim Bayal did not respond to ET’s queries. Dalmia Bharat declined to comment.
Birla Tyres was admitted for insolvency proceedings by the Kolkata bench of National Company Law Tribunal (NCLT) NCLT on May 5 last year. On May 2, ET had reported about the Dalmia Group’s original offer of INR 100 crore.
Birla Tyres was spun off from Kesoram Industries in 2019. The company is part of the business group of the late Basant Kumar Birla.
Axis Bank leads the list of creditors and accounts for almost half of the loans made by banks to the company.
Over two dozen expressions of interest were received from applicants interested in proposing a debt resolution for Birla Tyres. The list included Ceat, India Resurgent Fund, Jindal Steel & Power, Bommidala Enterprises, MCPI and Himadri Speciality Chemicals.
According to Birla Tyres’ website, the company has been in the business of manufacturing tyres for 25 years. It earlier had a collaboration with Italians tyre manufacturer Pirelli.
Birla Tyres has not been able to finalise its accounts for the financial year ending March 31, the court-appointed resolution professional, Pratim Bayal, informed the stock exchanges on May 29.
“The corporate debtor is under severe financial stress and is running with a skeletal staff,” Bayal informed stock exchanges. “Most key employees, top-level management and personnel having knowledge of the affairs and operations of the corporate debtor are no longer engaged with the corporate debtor owing to initiation of CIRP.”
In the stock exchange filing, Bayal said certain decisions were still pending with the committee of creditors, which was delaying finalisation of accounts.
“Kindly note that as there are some decisions relating to the accounting policy and valuation related matters which are pending to be undertaken by the members of the committee of creditors, the resolution professional needs some more time to finalise the books of account for the corporate debtor for the FY22-23,” the notification said.
