NEW DELHI: India’s third-largest tire maker JK Tires he has emerged as the leader in buying Birla tires from Kesoram Industries, the flagship company of the Birla group, starting with BK, for slightly more than a rupee. The amount is 20,000 crore dollars, said two people familiar with the matter. The deal will give the company a market share in India starting from 13% Increase JK to about one-fifth, increasing JK to Tires equal to second place Apoloolo compared to Tires.

A source close to the matter said, “Discussions are at an advanced stage and the outline of a broad deal has been finalized. The deal could be finalized soon or next week. The funds for the proposed acquisition have been raised. “Birla The company has rejected any sale of the unit. Kesoram Industries Gautam secretary Ganguli SMSed: “Kesoram has no intention to damage the tire parts (Birla Tires).”

The deal can be funded through a combination of debt and equity. JK Tires will borrow Rs. 150 crore from public and private banks and the rest from internal accruals. Another official said, “A consortium led by State Bank of India and many private banks have committed to fund the proposed deal.”

Kolkata-based Kesoram Last year, the three-member board was appointed to restructure the group’s business in the cement, tire, rayon, transparencies and filament sectors. Kesoram then initiated the sale process and appointed a European bank to manage the activity.

For the past six months, Kesoram MRF has been negotiating with India’s top three tire makers, Apollo and JK. A source is quoted above: “Ultimately, JK emerged as a formidable competitor because the price they offered beat everyone else.”

The deal was for Rs 100. 2,000-2,200 crore more than double the market capitalization of Kesoram Industries. On Friday, the stock rose 5.83% to close at Rs 1,000. BSE has a market capitalization of Rs 81.65. 896.28 million rupees. JK Tires closed 2% lower at Rs. Its market capitalization stood at Rs 84.20 crore or Rs 19.09 crore.

JK Tire declined to comment.

A source at JK Tire said, “The company is only focused on planned work and will not respond to any speculative news.” JK Tires as a brand is expanding into new global markets and will continue to design and manufacture world-class products in all segments. We will do that,” he said. Tire segment. The company said its Chennai plant is being expanded and “is expected to be operational in the third quarter of 2015 expansion. For Kesoram The sale of its headquarters in Laxal, Uttarakhand, will reduce the risk of its debt-heavy balance sheet. Leverage. In fiscal 2014, the tire business contributed nearly half of the company’s earnings before interest, depreciation and amortization (EBITDA), freeing up working capital for other businesses.

The company also has a plant in Balasore, Orissa. It has an annual capacity of 12.1 million tires, of which only half was used in fiscal 2014. The Uttarakhand plant, which is twice the size of the existing Balasore plant, was set up in 1991 with Pirelli of Italy. But cost overruns and debt have led to operating losses, according to people familiar with the matter.