The Hindu : Business : Falcon Tyres to split shares

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Falcon Tyres to split shares

Special Correspondent

To issue bonus shares in the ratio of 2:1

KOLKATA: The board of Falcon Tyres has recommended the splitting of shares followed by the issue of bonus shares. About 14 per cent of the shares of the company are now in the market. The P. K. Ruia group acquired this erstwhile Manu Chhabria group company in 2005 and now holds 86 per cent of the shares which it wants to bring down.

Shares of Rs. 10 each will be split into two shares of Rs. 5 each and bonus shares will be issued in the ratio of two shares for every share held. However, these bonus shares would not be entitled to dividend out of the profits for 2008-09, the company said.

Encouraged by the improved results during the first quarter, the company has decided to introduce continuous operations at its Mysore plant. The agreement to this effect was signed with the workers on July 15.

The company has chalked out a Rs. 300-crore expansion plan for the unit that will take the capacity from 7.5 lakh tyres to 9 lakh units and then to 14 lakh a month within this fiscal.

Falcon Tyres ended the first quarter with improved margins, reporting a net profit of Rs. 12.54 crore against Rs. 54 lakh in April-June 2007-08. Mr. Ruia said this was due to restructuring of operations and phasing out of un-remunerative products. This also led to a dip in net turnover, but margins have improved, he said.

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