JK Tyre increases stake in Cavendish Industries to 71.91%

JK Tyre already holds 69% of the equity shares of Cavendish Industries Limited.

JK Tyre & Industries, one of India's leading tyre makers, has further increased its stake in Cavendish Industries Ltd (CIL) from the initial 69 percent to 71.91 percent on a standalone basis. If we include the stake held by its subsidiary -JK Tornel in Mexico, the rise is from 85 percent to 86.41. The company has infused Rs 75 crore to acquire 2.91 percent in Cavendish Industries.

In a regulatory filing on March 26, JK Tyre said the objective of the acquisition is "to mobilise long term finance for miscellaneous corporate purposes and also for meeting requirements of funds for expansion of manufacturing capacities at company's tyre plant at Laksar near Haridwar."

Also See: JK Tyre Leadership Announces Voluntary Pay Cut Of 15-25%

JK Tyre was already holding 69 percent of the equity shares of CIL while it's subsidiary JK Tornel SA De CV, Mexico held about 16 percent of the equity. Therefore, combined holding of JK Tyre along with its subsidiary is 85 percent. "With this transaction, the shareholding will go up from 85 percent to 86.41 percent," JK Tyre said.

"The preferential issue is being made by CIL to JK Tyre, This is a related party transaction and the same is done at 'arms length'." the statement

JK Tyre had acquired Cavendish Industries in 2016 for Rs 2,195 crore. The acquisition had helped the company expand its ,manufacturing capacity to 1.2 million units of truck radials, 0.63 million units of two and three-wheeler tyres along with an increased capacity for bias tyres.

The addition allowed the company to take its total capacity to 34.7 million tyres a year across 12 manufacturing plants situated in India and Mexico.

Source

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