Promoters now offer Rs 91/share for FIs’ stake in Modi Rubber

MUMBAI: Promoters of Modi Rubber have offered to buy out financial institutions’ holding in their company at Rs 91 per share, twice what was offered a couple of years ago when negotiations began. The offer was made after the institutions invited tenders for their 44% shareholding in the company.

Interestingly, some of the foreign funds have also shown interest to buy the stake, said institutional sources. Over and above a higher price, Modis are understood to have offered to buy back some of the debt. The bids, which included one each from both the promoter brothers - VK Modi and BK Modi, were opened on Wednesday.

The institutions are likely to take a decision today, ending a deadlock that has lasted years. Sources said that an investment bank had also shown interest. However, details of other bids are not available.

BK Modi is understood to have bid around Rs 79 per share, while VK Modi is understood to have put in a bid at Rs 91. Rival tyremakers like Apollo had shown interest in the company in the past. The bids values the ailing tyremaker at around Rs 227 crore. Sources say that the value of the land held by the company has gone up substantially on account of a boom in real estate prices.

Financial institutions are also keen on exiting the company as they are not realising any value by holding on to their shares. According to the shareholding pattern filed with the stock exchange, the promoter brothers hold 3.87%, while the institutions hold 44.3%.