The shareholding of Apollo Tyres Limited promoter Onkar S Kanwar will come down by 6.54 per cent to 37.33 per cent after preferential allotment of 14.90 per cent of the company's existing shares to French Tyre major Michelin Group.
After the proposed allotment of shares to Michelin, the stake of promoters and business associates in the company would come down to 37.33 per cent from the existing 43.87 per cent, an ATL official said in Kolkata.
The shareholding of FIs, MFs, banks and the government of Kerala would stand reduced to 19.58 per cent from 23.01 per cent, while that of public and others would come down to 28.19 per cent from 33.12 per cent at present.
ATL had announced on November 17 to allot 14.90 per stake in the company to world's largest tyre maker, Michelin, for Rs 134.82 crore (Rs 1.35 billion) to enter into a technical alliance for manufacturing passenger car radial tyres by ATL, and also set up a 51:49 joint venture with it for manufacturing and marketing truck and bus radial tyres.
The French group planned to invest about Rs 322 crore (Rs 3.22 billion) over the next four years to build a greenfield manufacturing unit for passenger car radial tyres in India, the production of which was expected to begin in September, 2005.
The new JV firm was expected to start marketing imported tyres from April 2004 with the dual-brand of Michelin and Apollo.
Meanwhile, ATL has convened an extra-ordinary general meeting on December 15 in Kochi to seek shareholders' approval to allot 56,12,500 equity shares comprising 14.90 per cent of ATL's total equity to Michelin Group's investing arm, Campagnie Financiere Michelin, at a price of Rs 134.82 crore through a preferential issue.
Giving details of the management structure of the proposed JV, ATL officials said Michelin would have four nominees against Apollo's three. However, for picking up stake in the parent company, two directors on behalf of Michelin would be inducted on the board of ATL, they said.
Officials said all the products imported or manufactured by JVC in which Michelin will have 51 per cent stake would be sold through Apollo's distribution network, while the French company would provide technology for manufacturing products, and capacity/funding would be achieved in a phased manner.
"With globalisation and the opening up of Indian economy, companies are consistently looking at consolidating their position in the industry with aggressive and innovative strategies through technical and strategic alliances, merger and acquisitions," the official said.
Michelin Group is one of the world's largest and innovative tyre manufacturers operating more than 70 manufacturing facilities in 18 countries with an annual turnover of over 16 billion euro.
