Tornel Takeover to Give JK 15.3 Million Unit Capacity
The 100 per cent acquisition of Mexico’s Tornel by JK Tyre, announced on April 11, sees the Indian tyre manufacturer become the country’s fourth-largest. The £34.19 million acquisition, which is expected to close by the end of May, will be funded through a special purpose vehicle (SPV) – a company created solely for this particular transaction – based in Mexico.
“We will raise the money through internal accruals and debt, which will be structured though a SPV,” commented JK Tyres & Industries’ vice-chairman & managing director Raghupati Singhania. “Tornel will be a fully-owned subsidiary of JK Tyres and there will be no dilution of the existing shareholding in the company. We shall also bring a rights issue in the next few months, which will be in the ratio of 3:1, to help bridge the funds for the acquisition. The price of the issue will be determined at the time of offer.”