Nearly two-and-a-half years after shutters were downed at Modi Rubber Ltds (MRL) tyre manufacturing factory at Modipuram, promoter brothers BK and VK Modi have taken the first step forward towards revival of the company by signing a workers agreement.
Sources said MRL will put in a restructuring proposal before financial institutions and banks that is likely to include a complete buyout of 43 per cent institutional stake by the promoters.
Sources said the workers have been told by management representatives that factory operations could start within the current financial year ending March 2004.
MRL has been jointly managed by the two Modi brothers for the past many years though other factions of the Modi family also own some shares in the company.
The bulk of the 46 per cent Modi family shareholding is controlled by VK and BK Modi.
The sudden activity in the Indian tyre industry may have come as a blessing for MRL.
International tyre giant Michelin recently announced acquisition of a strategic stake in Apollo Tyres besides announcing a new joint venture with Apollo. At the same time, JK Tyres is believed to be negotiating a deepening of its technical collaboration with global tyre giant Continental which is also a technical partner of MRL. In fact, Modi Rubber produced co-branded tyres Modi Continental till the factory was closed down on July 7, 2001, on the back of major losses. The losses have further increased during the past two-and-a-half years.
Sources said once the company revives its operations, it could then take advantage of the international tyre companies interest in Indian tyre manufacturers by deepening its relationship with Contin-ental or entering into an alliance with a large domestic player.