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PRELIMINARY INFORMATION MEMORANDUM
IN CONNECTION WITH THE PROPOSED DISINVESTMENT OF
100% EQUITY SHAREHOLDING OF TYRE CORPORATION OF INDIA LTD.,
HELD BY THE GOVERNMENT OF INDIA “SALE”
ISSUED BY:
SBI CAPITAL MARKETS LIMITED, IN ITS CAPACITY AS “ADVISOR” TO THE GOVERNMENT OF
INDIA
JULY, 2012
TYRE CORPORATION OF INDIA LTD.
PRELIMINARY INFORMATION MEMORANDUM - -
A
DISCLAIMER NOTICE
SBI Capital Markets Limited (herein after referred to as ―SBICAP‖ or
―Advisor‖) has been appointed as the advisor by the Department of
Disinvestment, Ministry of Finance, Government of India (herein after
referred to as ―DoD‖) pursuant to the agreement for engagement of advisor
dated April 19, 2012, to assist the DoD in the proposed disinvestment of
Tyre Corporation of India Limited (herein after referred to as "TCIL" or
"the Company"). The President of India, acting through the Department of
Heavy Industry, Ministry of Heavy Industries and Public Enterprises,
Government of India (herein after referred to as "DHI") proposes to sell
100% of its equity shareholding in TCIL through the disinvestment.
The sole purpose of this Preliminary Information Memorandum, (herein
after referred to as "PIM" or "Memorandum"), prepared by SBICAP, is to
assist the recipient in deciding on submitting an Expression of Interest
(herein after referred to as ―EoI‖) for the proposed purchase of 100% stake
in TCIL pursuant to the said proposed outright sale of TCIL by the President
of India, acting through the DHI.
This PIM is without regard to specific objectives, suitability, financial
situations and needs of any particular person and does not constitute any
recommendation, and should not be construed as an offer to sell or the
solicitation of an offer to buy, purchase or subscribe to any securities
mentioned therein, and neither this document nor anything contained herein
shall form the basis of or be relied upon in connection with any contract or
commitment whatsoever.
The information in this Memorandum is based on the information collected
by SBICAP from TCIL and from publicly available materials and has not
been independently verified by SBICAP and is for general information
purpose only. Nothing in these materials is intended by SBICAP or the
Company or the DHI or the DoD to be construed as legal, accounting,
technical or tax advice. While the information herein or any other written or
oral information made available to any recipient or its advisors is believed to
be accurate, no representation or warranty, express or implied is or will be
made that it is accurate, authentic, fair, correct, adequate or complete and
SBICAP or its affiliates, nor any person who controls it or any director,
officer, employee, advisor or agent of it, or affiliate of any such person or
such persons do not accept any responsibility or liability for any such
information or opinions and therefore, any liability or responsibility in
relation to any omission or misstatement in relation to any information
contained in the PIM is expressly disclaimed.
This PIM is divided into chapters & sub-sections only for the purpose of
reading convenience. Any partial reading of this PIM may lead to inferences,
which may be at divergence with the conclusions and opinions based on the
entirety of this PIM. This document may not be all inclusive and may not
contain all of the information that the recipient may require or consider
material. The information contained in the PIM is subject to updating,
expansion, revision and amendment. While SBICAP/TCIL shall endeavour
to furnish further relevant information and/or clarifications, they undertake
no obligation to provide the recipient with access to any additional
information or to update this PIM or to correct any inaccuracies therein,
whether apparent, or not and such further information and/or clarifications
will also be subject to this Disclaimer Notice. The statements in this
Memorandum have been expressed in good faith. Recipients should rely on
TYRE CORPORATION OF INDIA LTD.
PRELIMINARY INFORMATION MEMORANDUM - -
B
their own judgement in assessing future business conditions and prospects of
the Company.
Neither SBICAP and its affiliates, nor its directors, employees, agents or
representatives or the Company or the DHI or the DoD shall be liable for
any damages whether direct or indirect, incidental, special or consequential
including lost revenue or lost profits that may arise from or in connection
with the use of this document. This document may contain confidential,
proprietary and/or legally privileged information and it must be kept
confidential by the recipient.
All acts, deeds and things done or caused or intended to be done, by TCIL
and/or SBICAP and/or the recipient hereunder are based on and in reliance
of the recipients‘ acceptance of the terms and conditions of this Disclaimer
Notice, which is hereby acknowledged to be legally binding. The recipient
agrees to abide by and comply with the terms hereof and agree not to assert
anything which is in variance with the terms of this Disclaimer Notice. By
accepting a copy of this PIM, the recipient accepts the terms of this
Disclaimer Notice, which forms an integral part of this PIM. Recipients
hereof is deemed to acknowledge that its/his/her participation in the Sale
process will not create or confer upon the recipients any rights and
expectations and any such rights or expectations are hereby denied.
Each recipient will be required to acknowledge in any agreement relating to
the proposed Sale of TCIL that it has not been induced to enter into such
agreement by any representation or warranty, express or implied, or relied
upon any such representation or warranty save as expressly set out in such
agreement. In all cases, recipients should conduct their own investigation
and analysis of the information contained in the PIM and any other
information provided to or obtained by them.
SBICAP has been appointed by the DoD to assist in the proposed outright
Sale of TCIL and will not regard any other person or entity (whether or not a
recipient of this PIM) as its customer in relation to this
assignment/transaction.
SBICAP will act as the primary point of contact for the interested parties.
Interested Parties should note that all correspondence, enquiries,
clarifications in relation to the proposed sale should be routed and addressed
only through the representative of the Advisor as indicated below. Neither
the DoD, DHI or TCIL shall be responsible in any manner to address such
communication directly to Interested Parties.
All enquiries should be addressed to the following representative of SBICAP
at:
Mr. Suchismit Ghosh
M &A & Corporate Advisory
SBI Capital Markets Limited
202, Maker Tower 'E'
Cuffe Parade, Mumbai 400005
Phone : 91-22-2217 8441 (D)
Boardline : 91-22-2217 8300
Fax : 91-22-2218 8332/6765
Email: [email protected]
Mr. Amit Kumar
M &A & Corporate Advisory
SBI Capital Markets Limited
202, Maker Tower 'E'
Cuffe Parade, Mumbai 400005
Phone : 91-22-2217 8404 (D)
Boardline : 91-22-2217 8300
Fax : 91-22-2218 8332 /6765
Email : [email protected]
TYRE CORPORATION OF INDIA LTD.
PRELIMINARY INFORMATION MEMORANDUM - -
C
This PIM is issued by SBI Capital Markets Limited without any
liability/undertaking/commitment on the part of itself or State Bank of India
or any other entity in the State Bank Group, except where it is explicitly
stated. Further, in case of any commitment on behalf of State Bank of India
or any other entity in the State Bank Group, such commitment is valid only
when separately confirmed by that entity.
ABBREVIATIONS
All acts, rules, regulations, bye-laws, guidelines, notifications, agreements and
documents referred to in this PIM shall be deemed to include all
amendments thereto if any
% Percentage
AAIFR Apellate Authority for Industrial and Financial
Reconstruction BIFR Board for Industrial and Financial Reconstruction,
Ministry of Finance, Government of India
CAGR Compound Annual Growth Rate
DHI Department of Heavy Industry, Ministry of Heavy Industries and Public Enterprises, Government of India
DoD Department of Disinvestment, Ministry of Finance, Government of India
FIPB Foreign Investment Promotion Board, Minstry of Finance, Government of India
FY Financial Year
GoI Government of India
INR/ Rs Indian Rupee
IP Interested Party
MT Metric Tonnes
PAT Profit After Tax
PBDIT/ EBDIT Profit/Earnings before depreciation, interest and tax
PBDITA/ EBDITA Profit/Earnings before depreciation, interest, tax and ammortisation
PBT Profit Before Tax
PIM Preliminary Information Memorandum
QIP Qualified Interested Party
Rs. Indian Rupee
RFP Request for Proposal
RFQ Request for Qualification
SBICAP SBI Capital Markets Limited
SICA Sick Industrial Companies (Special Provisions) Act, 1985
TCIL Tyre Corporation of India Limited
TCIL Disinvestment Act 2007
The Tyre Corporation of India Limited (Disinvestment of Ownership) Act, 2007
USD United States Dollar
EoI Expression of Interest
IMPORTANT DATES
DATE OF PRE – BID CONFERENCE: JULY 27, 2012
LAST DATE OF SUBMISSION OF EOI: AUGUST 13, 2012
TYRE CORPORATION OF INDIA LTD.
PRELIMINARY INFORMATION MEMORANDUM - -
D
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TYRE CORPORATION OF INDIA LTD.
CONFIDENTIAL INFORMATION MEMORANDUM, STRICTLY PRIVATE AND CONFIDENTIAL
I
INDEX OF CONTENTS 1 Introduction .................................................................................... 2
1.1 TCIL - DISINVESTMENT................................................................ 2 1.2 CONTACT DETAILS ....................................................................... 2
2 The proposed Sale ........................................................................... 4 3 Company overview .......................................................................... 7
3.1 BACKGROUND .............................................................................. 7 3.1.1.1 Objectives of Incorporation ........................................................ 7 3.1.1.2 BIFR Status ................................................................................. 7
3.2 ACTIVITIES.................................................................................... 8 3.3 REGISTERED OFFICE ..................................................................... 8 3.4 PLANT LOCATION ......................................................................... 8
3.4.1 Automotive Tyre manufacturing unit: Full Address .............. 8 3.4.2 Reclaimed Rubber UNIT: Full Address ................................ 8
3.5 BOARD OF DIRECTORS .................................................................. 8 3.6 HUMAN RESOURCES ..................................................................... 9 3.7 QUALITY CONTROL ...................................................................... 9 3.8 MARKETS & MARKETING ARRANGEMENTS ................................. 9 3.9 CAPITAL STRUCTURE ................................................................... 9 3.10 IMMOVABLE ASSET BASE ............................................................. 9
3.10.1 Land....................................................................................... 9 3.10.2 Plant & Machinery .............................................................. 10
3.11 STRENGTHS & OPPORTUNITIES .................................................. 11 4 Financials ....................................................................................... 14 5 Eligibility Criteria for the Interested Parties ................................. 17 6 Instructions For Submission of EoI .............................................. 20 7 Disqualifications ............................................................................ 23
INDEX OF TABLES Table 1 : TCIL - Board of Directors...................................................................................... 9 Table 2: TCIL - Human Resource Strength………………………………………....9 Table 3 : TCIL - Land Details ................................................................................................. 9
Table 4 : TCIL - Manufacturing Facilities .......................................................................... 10 Table 5 : TCIL - Finished Product Destructive Testing facilities .................................. 11 Table 6 : TCIL - Utility Service Facilities ........................................................................... 11 Table 7 : TCIL Financials - Balance Sheet Extract (Rs. Lakh) ....................................... 14 Table 8 : TCIL Financials - P&L Extract (Rs. Lakh) ....................................................... 14 Table 9 : TCIL Financials - Notional Value of Jobbing Work (Rs. Lakh) ................... 15
INDEX OF ANNEXURE Annexure 1: Tyre Corporation of India Limited (Disinvestment of Ownership) Act, 2007 ........................................................................................................................................... 25 Annexure 2: Format for Letter of EoI, in case there is a Sole IP .................................. 26 Annexure 3: Format for Letter of EoI, in case there is a Consortium of IPs ............. 28 Annexure 4: Statement of Legal Capacity for Sole IP ..................................................... 30 Annexure 5: Statement of Legal Capacity for Consortium Members ........................... 31 Annexure 6: Format of Request for Qualification ........................................................... 32 Annexure 7: Office Memorandum No. 6/4/2001-DD-II .............................................. 34 Annexure 8: Confidentiality Undertaking .......................................................................... 36
TYRE CORPORATION OF INDIA LTD.
PRELIMINARY INFORMATION MEMORANDUM PAGE 1
PRELIMINARY INFORMATION MEMORANDUM
IN CONNECTION WITH THE PROPOSED DISINVESTMENT OF
100% EQUITY SHAREHOLDING OF TYRE CORPORATION OF INDIA LTD.,
HELD BY THE GOVERNMENT OF INDIA “SALE”
SECTION 1: INTRODUCTION
This Section discusses: a) Brief of Government decision regarding disinvestment in the Company
b) Extent of equity held by the Government
c) Extent of equity to be the disinvested
d) Contact person, the relevant telephone numbers and fax nos. and email addresses
TYRE CORPORATION OF INDIA LTD.
PRELIMINARY INFORMATION MEMORANDUM PAGE 2
1 INTRODUCTION
1.1 TCIL - Disinvestment
TCIL, a Central Public Sector Enterprise under the Department of Heavy
Industry, Ministry of Heavy Industries and Public Enterprises, Government
of India (herein after referred to as ―DHI‖), was incorporated on February
24, 1984 under the Companies Act, 1956 for the purpose of acquiring and
taking over from the Government of India (herein after referred to as ―GoI‖)
all rights, title and interest of the nationalized units (M/s Incheck Tyre
Limited, Kankinara (West Bengal), and M/s National Rubber Manufacturers
Limited, Tangra (West Bengal), by the Inchek Tyres Limited and National
Rubber Manufacturers Limited (Nationalization) Ordinance, 1984 No. 4 of
1984 and the Inchek Tyres Limited and National Rubber Manufacturers
Limited (Nationalization) Act, 1984 No. 17 of 1984). Assets of these
nationalized units were transfered to and vested on TCIL on March 5, 1984.
Pursuant to the TCIL Disinvestment Act, the President of India acting
through DHI, has decided to disinvest its entire holding of 100% of the
equity share capital of TCIL through an outright sale on an ‗as is where is‘
basis (the ―Sale‖). The Tyre Corporation of India Limited (Disinvestment of
Ownership) Bill, 2007, empowering the GoI to carry out disinvestment in the
equity share capital of TCIL has been passed by both houses of Parliament,
and notified in the official Gazette of India in the form of the TCIL
Disinvestment Act.
The GoI acting through the Department of Disinvestment, Ministry of
Finance, Government of India (the ―DoD‖) has appointed SBI Capital
Markets Limited as its advisor to advise and manage the Sale process of
TCIL.
Broad terms of the proposed Sale are discussed in Section 2.
1.2 Contact Details
All enquiries should be addressed to the following representative of SBICAP
at:
Mr. Suchismit Ghosh
Vice President
M &A & Corporate Advisory
SBI Capital Markets Limited
202, Maker Tower 'E'
Cuffe Parade, Mumbai 400005
Phone : 91-22-2217 8441(D)
Boardline : 91-22-2217 8300
Fax : 91-22-2218 8332 /6765
Email: [email protected]
Interested Parties should note that all correspondence, enquiries,
clarifications in relation to the proposed sale should be routed and addressed
only through the representative of the Advisor as aforesaid. Neither the
DoD, DHI or TCIL shall be responsible in any manner to address such
communication directly to Interested Parties.
Mr. Amit Kumar
M &A & Corporate Advisory
SBI Capital Markets Limited
202, Maker Tower 'E'
Cuffe Parade, Mumbai 400005
Phone : 91-22-2217 8404
Boardline : 91-22-2217 8300
Fax : 91-22-2218 8332 /6765
Email : [email protected]
TYRE CORPORATION OF INDIA LTD.
PRELIMINARY INFORMATION MEMORANDUM PAGE 3
PRELIMINARY INFORMATION MEMORANDUM
IN CONNECTION WITH THE PROPOSED DISINVESTMENT OF
100% EQUITY SHAREHOLDING OF TYRE CORPORATION OF INDIA LTD.,
HELD BY THE GOVERNMENT OF INDIA “SALE”
SECTION 2: PROPOSED SALE
This Section discusses:
a) Proposed Sale
TYRE CORPORATION OF INDIA LTD.
PRELIMINARY INFORMATION MEMORANDUM PAGE 4
2 THE PROPOSED SALE
2.1 Pursuant to the TCIL Disinvestment Act, the President of India
acting through DHI, has decided to disinvest its entire holding of 100% of
the equity share capital of TCIL through an outright sale on an ‗as is where is‘
basis. The Tyre Corporation of India Limited (Disinvestment of Ownership)
Bill, 2007, empowering the GoI to carry out disinvestment in the equity share
capital of TCIL has been passed by both houses of Parliament, and notified
in the official Gazette of India in the form of the TCIL Disinvestment Act.
2.2 Through an announcement dated July 13, 2012 (―Announcement‖),
the Advisor invited, on behalf of DoD, Expressions of Interest (―EoI’s‖)
from Interested Parties, ―IPs‖ (as more clearly defined under paragraph 5) for
the proposed Sale.
2.3 The Broad terms of Sale are as detailed below:
2.3.1 The Company is proposed to be sold on an ―as is where is‖
basis.
2.3.2 According to TCIL Act 2007 every officer or other
employee of the Company, except Chairman and Directors, serving
in its employment immediately before the disinvestment of the
Company shall continue in office or service after such disinvestment,
on same terms and conditions as would have been admissible to him
if there had been no such disinvestment and shall continue to do so
until the expiry of the period of three (3) years from the date of
disinvestment.
2.3.3 Any existing, past or contingent liability (statutory or
otherwise) of the Company towards the Central Government, as on
or prior to the date of the Sale, or which has arisen for the period
before the date of the Sale and may get crystallized after the date of
Sale, shall be borne by the Seller. Any existing, past or contingent
liability (statutory or otherwise) towards any state government
and/or private agencies/ organizations/ individuals/ third parties in
respect of the Company, as on or prior to the date of the Sale, or
which has arisen for the period before the date of the Sale and may
get crystallized after the date of the Sale, shall be borne by the Buyer.
All liabilities of the Company accruing after the date of the Sale shall
be borne by the Buyer.
2.3.4 There will be no restriction on the background of the buyer,
i.e., the buyer need not necessarily have any prior experience in the
tyre industry.
2.4 Through this PIM, the Advisor is providing the IP‘s with
instructions for submitting their EoI‘s to the Advisor, in order to proceed
with the proposed Sale.
2.5 This PIM contains the following:
Company Overview
Company Financials
Detailed Eligibility Criteria for IPs
Instructions for Submission of EoI
Conditions/ Circumstances which may lead to a Disqualifications of
IPs
Format of EoI for a Sole Interested Party
TYRE CORPORATION OF INDIA LTD.
PRELIMINARY INFORMATION MEMORANDUM PAGE 5
Format of EoI for a Consortium of Interested Parties
Format of Confidentiality Undertaking
Statement of Legal Capacity
Format of Request for Qualification (―RFQ‖)
2.6 There will be a pre bid conference where questions and queries of
IPs related to this Sale will be clarified and all the clarifications will be
uploaded on the website of the Advisor, DoD, TCIL and DHI. Pre bid
conference will be conducted on July 27, 2012 at 2.30 PM in Committee
Room of DoD, Room No. 515, Block 14, CGO Complex, Lodhi Road, New
Delhi – 110003. An IP may send a maximum of two representatives to be
present in the said pre bid conference.
2.7 Following receipt of PIM, IPs will be required to respond in the
format as detailed in this PIM. Based on an evaluation of the EoI submitted,
IPs if shortlisted, will be provided a Confidential Information Memorandum
(―CIM‖) and the Request for Proposal (―RFP‖). The CIM and RFP will
provide further details of the Company and the proposed Sale.
2.8 Subsequently, a site visit (cost of which will be borne by the IPs)
would be scheduled to facilitate the IPs in their assessment of the Company.
2.9 On completion of site visits, the IPs would be given access to the
data room to review the documents pertaining to the Company to enable
them to conduct a due diligence on the Company. The modalities related to
the visit and due diligence will be communicated to the shortlisted IP in due
course.
2.10 The Sale process for the Company will be carried out via a
competitive bidding process. Details regarding the same will be subsequently
shared with the IPs in the RFP.
2.11 EoI‘s are liable to be rejected in case the DoD/Advisor is not
satisfied with the qualifying criteria of the IPs or for any other reason deemed
fit, without assigning any cause whatsoever.
2.12 DoD/Advisor reserves the right to modify/cancel or call off the
proposed Sale without assigning any reason whatsoever. It also reserves the
right to call for any additional document/information from the IPs, which
may be considered necessary.
2.13 The Company/DHI/DoD/Advisor reserves the right not to
respond to questions raised or provide clarifications sought, in their sole
discretion. Nothing in this document shall be taken or read as compelling or
requiring the DoD/Advisor to respond to any question or to provide any
clarification. No extension of any time and date referred to in this PIM shall
be granted on the basis or grounds that the Company/DHI/DoD/Advisor
has not responded to any question/ provided any clarification.
2.14 In case of any dispute between the parties in respect of interpretation
of the terms of Announcement inviting EoI‘s/ RFQ or anything arising there
from, such dispute or difference shall be referred to the Joint Secretary,
Department of Disinvestment, Ministry of Finance. Joint Secretary shall be
empowered to adjudicate and decide the disputes, if any, between the parties
and his decision shall be final, conclusive and binding on both the parties.
The laws of Union of India shall govern all matters relating to the proposed
Sale. All disputes will be subject to jurisdiction of the Courts at Delhi (with
exclusion of all other Courts).
TYRE CORPORATION OF INDIA LTD.
PRELIMINARY INFORMATION MEMORANDUM PAGE 6
PRELIMINARY INFORMATION MEMORANDUM
IN CONNECTION WITH THE PROPOSED DISINVESTMENT OF
100% EQUITY SHAREHOLDING OF TYRE CORPORATION OF INDIA LTD.,
HELD BY THE GOVERNMENT OF INDIA “SALE”
SECTION 3: TCIL – COMPANY OVERVIEW
This Section discusses:
a) Background
History
BIFR Status
b) Activities
c) Plant Location
d) Board of Directors
e) Human Resources
f) Quality Control
g) Markets and Marketing Arrangements
h) Capital Structure
i) Immovable Asset-Base
j) Strengths & Opportunities
TYRE CORPORATION OF INDIA LTD.
PRELIMINARY INFORMATION MEMORANDUM PAGE 7
3 COMPANY OVERVIEW
3.1 Background
TCIL was incorporated on February 24, 1984 under the Companies Act,
1956 for the purpose of acquiring and taking over from the GoI all rights,
title and interest of the nationalized units (M/s Incheck Tyre Limited,
Kankinara (West Bengal), and M/s National Rubber Manufacturers Limited,
Tangra (West Bengal). Assets of these nationalized units were transferred to
and vested on TCIL pursuant to vesting notification dated March 5, 1984.
TCIL is a Schedule ―B‖ PSU having authorized capital of Rs. 300.00 crore
and a paid-up capital of Rs. 29.63 crore as on March 31, 2011.
3.1.1 OBJECTIVES OF INCORPORATION
The main objectives of incorporation of TCIL were:
To acquire and to take over from the Government of India all the rights,
title and interest of the Automobile Tyre Factory of Incheck Tyres
Limited, 127, Kattadanga Road, Kankinara, 24-Parganas; Reclaimed
Rubber Factory of National Rubber Manufacturers Limited, situated at
29 & 30, Block D, Kalyani, Nadia and the Rubber Factory of National
Rubber Manufacturers Limited, situated at 54/10, Debendra Chandra
Dey Road, Calcutta-700015 with all assets and ancillaries including the
Brand names in accordance with any declaration/decision/direction of
the Government of India in this behalf.
To assume, acquire all freehold, leasehold, patent rights and tenancy
rights of all land, buildings, sheds and establishments including Head
office, Head Office (Sales) and Branches situated in India or anywhere in
the world of the above undertakings.
To deal in and manufacture and sell rubber hose of all kinds, rubber
sheets and beltings of all descriptions, moulded rubber goods, rubber
rollers and rubber goods of all kinds and reclaimed rubber of all types.
To buy, sell and deal in rubber - raw, manufactured or otherwise.
To construct, produce, prepare, manufacture, press, vulcanise, repair,
retread, purchase, sell, import , export and generally to deal in tyres, semi
– tyres for any type of vehicles for heavy, light and passenger transport,
cars, trucks and bushes, motor cycles, moped, scooter, cycle and
rickshaw, tractors, aeroplane, industrial tyres and solid tyres, inner tubes,
flaps, repair materials, technical articles and other various articles and
appliances made of natural and synthetic rubber, their derivatives and
substitutes, rubber latex, synthetic resins and plastics in general and
furthermore all the products, by- products including textiles, leather,
metals, chemicals in general and all components and accessories relating
to tyres and tubes or industry and commerce in general.
3.1.2 BIFR STATUS
TCIL, on reference to the Board of Industrial and Financial Reconstruction
(the ―BIFR‖), was declared sick on December 18, 1992, pursuant to which a
draft rehabilitation scheme order was sanctioned on February 15, 1996
pursuant to order dated December 13, 1994, which was not consented to by
the Ministry of Heavy Industries and Public Enterprises, Government of
India, and hence could not be implemented. Following subsequent
proceedings, the revival scheme for TCIL was finally sanctioned on March 3,
TYRE CORPORATION OF INDIA LTD.
PRELIMINARY INFORMATION MEMORANDUM PAGE 8
2010. Thereafter, pursuant to order dated December 21, 2011, the BIFR
discharged TCIL from under its purview in view of the net worth of TCIL
becoming positive, despite being apprised of the fact that TCIL had not
received certain concessions due to it pursuant to the revival scheme. On
account of incomplete implementation of the revival scheme resulting in
reduced net worth, and unimplemented reliefs and concessions, and to
continue protection of TCIL under the Sick Industrial Companies Act, 1985,
as approved by the DHI, TCIL filed an appeal on February 23, 2012 against
the order of the BIFR dated December 21, 2011 before the AAIFR which
has been rejected by AAIFR vide their order dated May 11, 2012. However,
AAIFR order confirmed that the unimplemented provisions of the BIFR
sanctioned scheme are binding on all the parties U/s 18(8) of SICA.
3.2 Activities
TCIL is engaged in the manufacture of automotive tyres, bias technology-
based tyres for buses, trucks, and tractors and rayon-based radial car tyres.
Presently the Company has been undertaking manufacture of tyres for
leading private players like JK Tyre & Industries Limited, CEAT Limited,
Apollo Tyres Limited, on a contract basis work etc.
3.3 Registered Office
The Registered Office of the Company is located at Leslie House, 19
Jawaharlal Nehru Road, Kolkata – 700087, West Bengal. The Company
utilises this property on a monthly rental basis.
3.4 Plant Location
TCIL owns two plants:
a. Automotive Tyre Manufacturing Unit: located at Kankinara, West
Bengal
b. Reclaimed Rubber Unit: located at Kalyani, West Bengal
3.4.1 AUTOMOTIVE TYRE MANUFACTURING UNIT: FULL
ADDRESS
―Tyre Division‖
127, Katadanga Road, Fingapara, Kankinara, 24 Parganas (North)
P.S. Jagatdal, Bhatpara Municipality, West Bengal 743129
3.4.2 RECLAIMED RUBBER UNIT: FULL ADDRESS
Plot No. 29 & 30 in Block-D at Kalyani Industrial Estate
(Kanchrapara Area Development Scheme).
Subdivision-Ranaghat, Thana-Chakdaha,
Sub Registry Office- Ranaghat, Kalyani Notified area,
Dist-Nadia, West Bengal.
Reclaimed Rubber Unit at Kalyani is in close proximity to the automotive
tyre manufacturing unit at Kankinara.
Currently, only the unit at Kankinara is operational; and the reclaimed rubber
unit at Kalyani is non-operational since August, 1992. No maintenance has
been carried out in this unit since its closure.
3.5 Board of Directors
The Board of Directors of TCIL consists of two full-time directors and one
part-time director as representative of GoI. The composition of the Board of
Directors as on May 2012 is shown below in Table 1.
TYRE CORPORATION OF INDIA LTD.
PRELIMINARY INFORMATION MEMORANDUM PAGE 9
TABLE 1 : TCIL - BOARD OF DIRECTORS
Brig. (retd.) Surinder Kumar Mutreja Chairman-cum-Managing Director
(from August 2, 2010
Shri Pradyut Baran Koner Director (Production) (from March
1, 2010)
Shri Rohit Kumar Parmar Director (from September 13, 2011)
3.6 Human Resources
Table 2 below shows the human resource strength of TCIL as on January 1,
2012.
TABLE 2 : TCIL – HUMAN RESOURCE STRENGTH
As on 01-Jan-2012 Permanent
Employees
Contractual
Employees
Contract
Labor
Outsourced
Executive/Officers 28 18 - -
NUS 6 9 - -
Staff/Sub-Staff 53 4 - -
Workmen 68 - 636 -
Security Personnel - - - 46
Total 155 31 636 46
3.7 Quality Control
The Company is equipped with testing facilities for all incoming raw materials
and in-process materials, for quality control of both raw materials as well as
processed materials.
3.8 Markets & Marketing arrangements
Currently, the Company has one liaison office in Delhi to cater to the
marketing activities. However, the Company has outsourced most of its
marketing activities to external agencies.
3.9 Capital Structure
As at March 31, 2011, the capital structure of the Company is as follows:
Authorized Share Capital – 3,00,00,000 equity shares of Rs. 100 each
amounting to Rs. 300 Cr
Issued, Subscribed and Fully Paid Up Share Capital – 29,63,079 equity shares
of Rs. 100 each amounting to Rs. 29.63 Cr
100% of the equity shareholding of the Company is with the GoI.
3.10 Immovable Asset Base
3.10.1 LAND
TCIL holds 30.77 acres of freehold land at the Kankinara plant, and another
29 acres of leasehold land at the Kalyani Unit, as shown below in Table 3.
TABLE 3 : TCIL - LAND DETAILS
Location of the Land Area of the Land
(a) Free hold land at Kankinara 127, Katadanga Road, Fingapara Kankinara, 24 Parganas (North) P.S. Jagatdal, Bhatpara Municipality
94 Bigha, 17 Katha, 8 Chatak & 26 sq. ft., or 30.77 Acres approximately
TYRE CORPORATION OF INDIA LTD.
PRELIMINARY INFORMATION MEMORANDUM PAGE 10
Location of the Land Area of the Land
Pin-743129
(b) Leasehold Land at Kalyani (999
Years)1 Plot No. 29 & 30 in Block-D at
87 Bigha, 12 Katha, 12 Chatak & 9 sq. ft., or 29 Acres Approximately
1 The Urban Land Ceiling Department, Government of West Bengal had initiated proceedings under the Urban Land (Ceiling and Regulation) Act, 1976 against National Rubber Manufacturers Limited in respect of certain portions of land situated at plot numbers 29 and 30, Block-D of Kalyani Township, which were held on lease by National Rubber Manufacturers Limited, and subsequently transferred to TCIL. Accordingly, the Urban Land Ceiling Department, Government of West Bengal initiated proceedings against TCIL for acquisition and vesting of the excess vacant land in the said premises. TCIL intimated to the Urban Land Ceiling Department, Government of West Bengal, the Principal Secretary, Industrial Reconstruction Department, Government of West Bengal and the concerned bench of the BIFR that the Urban Land Ceiling Department, Government of West Bengal had cancelled allotment of such land. The BIFR in its hearing held on May 21, 2009 sought clarification in this respect, in response to which the Industrial Reconstruction Department, Government of West Bengal informed the BIFR pursuant to letter dated October 30, 2009 that the Urban Land Ceiling Department, Government of West Bengal had revoked the order of cancellation of allotment provided that certain terms and conditions (including further investment in the said land, and the incorporation of a joint venture to revive the operation of the manufacturing unit situated on such land) was fulfilled. The Urban Land Ceiling Department, Govt. of West Bengal, pursuant to its letter dated March 13, 2012 stated that TCIL had not provided any information in respect of the said land and that if they do not receive the requisite documents from TCIL in the following 10 days, necessary steps would be taken to initiate the proceedings under the Urban Land (Ceiling and Regulation) Act, 1976 in respect of such land without making any further reference to TCIL. Subsequently, the Company replied to the letter dated March 13, 2012, on April 3, 2012 reiterating its submissions in respect of the premises in concern, emphasizing the revocation of the cancellation of allotment and lease of the said premises, and also apprising them of the disinvestment/outright sale being undertaken in respect of the Company and the rehabilitation measures being implemented. Subsequent to letter of TCIL dated April 3, 2012 to Urban Land Ceiling Department there is no reply from the Urban Land Ceiling Department, Govt. of West Bengal in this matter.
Location of the Land Area of the Land
Kalyani Industrial Estate (Kanchrapara Area Development Scheme). Subdivision-Ranaghat, Thana- Chakdaha, Sub Registry Office- Ranaghat, Kalyani Notified area, Dist-Nadia, West Bengal.
3.10.2 PLANT & MACHINERY
The Company has the entire range of Plant & Machineries required for tyre
manufacturing. An indicative list is given below in Table 4:
TABLE 4 : TCIL - MANUFACTURING FACILITIES
Machines Quantity Made by Capacity Equivalent Tyres per
day
Banbury-40 RPM
1 USSR 270 Lit. 85 MT= 2000 tyres
Banbury-30 RPM
2 USSR 270 Lit.
Dual Tread Extruder
1 Koblco Stewart Bolling
Inc,USA
2.5 to 25 Mtr./min
3600 pcs=3600
tyres
4 Roll Calender
1 Buzuluk, Czechoslovakia
60 mts/min 70000 mts = 5600 tyres
Bias Cutter 2 M/s Devon, India
5100 cut per shift
30600 mts = 2500 tyres
TYRE CORPORATION OF INDIA LTD.
PRELIMINARY INFORMATION MEMORANDUM PAGE 11
Machines Quantity Made by Capacity Equivalent Tyres per
day Pocket Machines
14 M/s Devon, India
200 pcs per M/c shift
8400 pcs = 2800 tyres
Truck Tyres Building M/C
14 SPD2, USSR 46 pcs per M/c shift
1932 Green tyres
Rear Tractor Building M/C
2 SPD2, USSR 30 pcs per M/c shift
60 Green tyres
Car tyre Building M/C--New
4 RB3, India 60 pcs per M/c shift
240 Green tyres
Car tyre Building M/C—Old
4 Devon, India 70 pcs per M/c shift
280 Green tyres
Presses
55 inches 17 ATMC, India 40 per press per day
1360 Giant tyres
17 USSR 40 per press per day
42 inches 4 ATMC, India 70 per press per day
272 car tyres per day
75 inches 2 USSR 17 per press per day
34 car tyres per day
The finished product destructive testing facilities are as under in Table 5:
TABLE 5 : TCIL - FINISHED PRODUCT DESTRUCTIVE TESTING
FACILITIES
Machines Quantity Made by Capacity Equivalent Tyres per
Day
Plunger Testing M/c
1 M/s Devon, India
8'' to 20'' ranges of
tyres
As per requirement
Pulley wheel testing M/c
1 Czechoslovakia 13'' to 28'' ranges of
tyres
As per requirement
The utility service facilities are as under in Table 6:
TABLE 6 : TCIL - UTILITY SERVICE FACILITIES
Machines Quantity Made by Capacity Equivalent Tyres per Day
Coal Fired Stoker Boiler
2 Iszes Thomson,
India
20 kg/cm2, 20 MT/Hr
3500 tyres with two boilers
3.11 Strengths & Opportunities
Strengths:
Owns a reclaimed rubber unit at Kalyani which is located close to
tyre manufacturing unit at Kankinara.
Cordial relations with State Transport Units, defense and
government organizations.
TYRE CORPORATION OF INDIA LTD.
PRELIMINARY INFORMATION MEMORANDUM PAGE 12
Clean balance sheet with no outstanding loan and positive net-worth
as on March 31, 2011
Products well accepted in Malaysia, Singapore, Bangladesh where
TCIL exported its tyres in past.
Opportunities:
Readily available operational plant along with excess land available
for capacity enhancement.
Opportunity to establish oneself in the eastern region.
Inchek was an established brand and had instant brand recall.
TYRE CORPORATION OF INDIA LTD.
PRELIMINARY INFORMATION MEMORANDUM PAGE 13
PRELIMINARY INFORMATION MEMORANDUM
IN CONNECTION WITH THE PROPOSED DISINVESTMENT OF
100% EQUITY SHAREHOLDING OF TYRE CORPORATION OF INDIA LTD.,
HELD BY THE GOVERNMENT OF INDIA “SALE”
SECTION 4: TCIL – FINANCIALS
This Section discusses: a) Summarised Balance Sheet for the last 5 years
b) Summarised P&L for the last 5 years
c) Notional Value of Jobbing Work
TYRE CORPORATION OF INDIA LTD.
PRELIMINARY INFORMATION MEMORANDUM PAGE 14
4 FINANCIALS
Table 7 and Table 8 below present summary of the audited financials for
FY08 to FY11 and provisional financials for FY12 of TCIL in a summarised
form.
TABLE 7 : TCIL FINANCIALS - BALANCE SHEET EXTRACT (RS. LAKH)
Balance Sheet 2011-12 (P) 2010-11 (A) 2009-10 (A) 2008-09 (A) 2007-08 (A)
ASSETS:
Gross Block (in Use) 11,886.27 11,885.12 11,874.99 11,848.43 11,815.97
Depreciation 10,714.70 10,134.80 9,548.83 8,965.51 8,383.75
Net Fixed Assets (In Use) 1,171.57 1,750.32 2,326.16 2,882.92 3,432.22
Gross Block (Not in Use) 69.87 69.87 69.87 69.87 69.87
Depreciation 49.20 48.91 48.63 48.34 48.06
Net Fixed Assets (Not In Use) 20.67 20.96 21.24 21.53 21.81
Capital Work in Progress 7.26 7.25 7.25 30.38 -
Plant & Machinery Awaiting
Installation 4.23 4.23 3.24 4.85 26.88
Capital goods in Stock 5.59 5.59 5.59 5.79 5.59
Total Current Assets, Loans &
Advances 635.63 662.43 727.14 750.22 1,316.97
Cash & Bank Balance 1,204.13 2,212.70 2,989.57 3,736.71 3,445.10
Investments 0.05 0.05 0.05 0.05 0.05
Total Assets 3,049.13 4,663.53 6,080.24 7,432.45 8,248.62
LIABILITIES:
Total Current Liabilities and
Provisions 2,321.23 1,863.92 1,957.66 1,843.22 3,212.34
Loan Funds* - - 20,286.25 20,286.25 73,848.12
Share Capital 2,963.08 2,963.08 9,344.54 9,344.54 9,344.54
Reserves 2,505.33 2,505.33 2,505.33 2,505.33 2,505.33
Accumulated Losses* (4,699.77) (2,628.04) (27,972.80) (26,506.15) (80,620.97)
Miscellaneous expenses not
written off 40.74 40.74 40.74 40.74 40.74
Net Worth 727.90 2,799.63 (16,163.67) (14,697.02) (68,811.84)
Total Liabilities 3,049.13 4,663.55 6,080.24 7,432.45 8,248.62
Note: P: Provisional, A: Audited
*As per the sanctioned BIFR revival scheme, the authorized share capital of
the Company has been increased to Rs. 30,000 Lakh and outstanding GoI
loan of Rs. 20,286.25 Lakh has been converted into equity. Therefore, Loan
Fund in FY11 has reduced to zero, as shown above in Table 7. After
converting the GoI loan into equity the increased equity of the Company was
Rs. 29,630.79 Lakh.
Rs. 26,667.71 Lakh of equity has been used to adjust Accumulated Loss,
resulting in a reduced share capital of Rs. 2963.08 Lakh and Accumulated loss
of Rs. 2,628.04 Lakh in FY11.
TABLE 8 : TCIL FINANCIALS - P&L EXTRACT (RS. LAKH)
Profit & Loss 2011-12 (P) 2010-11 (A) 2009-10 (A) 2008-09 (A) 2007-08 (A)
Total Income 1,261.64 2,703.92 936.15 2,927.14 4,567.77
Less : Operating Expenses 2,756.76 3,430.32 1,799.02 3,068.52 3,878.76
PBITDA (1,495.12) (726.40) (862.87) (141.38) 689.01
Less : Interest 1.34 11.45 10.33 8.27 5,112.21
Less : Depreciation 575.59 581.59 581.87 578.00 577.90
Profit (Loss) Before Tax (2,072.05) (1,319.44) (1,455.07) (727.65) (5,001.10) Note: P: Provisional, A: Audited
Currently the income booked by TCIL relates mainly to the jobbing work
being carried out by it for other tyre manufacturers.
Table 9 below shows the notional value of jobbing work being carried out by
TCIL. Notional Value of jobbing work would reflect the income booked by
the Company in case it had been sourcing its own raw material and selling the
finished product under its own brand name.
TYRE CORPORATION OF INDIA LTD.
PRELIMINARY INFORMATION MEMORANDUM PAGE 15
TABLE 9 : TCIL FINANCIALS - NOTIONAL VALUE OF JOBBING WORK
(RS. LAKH)
15,505
22,429
12,837
3,482
18,187
-
5,000
10,000
15,000
20,000
25,000
2006-07 2007-08 2008-09 2009-10 2010-11
TYRE CORPORATION OF INDIA LTD.
PRELIMINARY INFORMATION MEMORANDUM PAGE 16
PRELIMINARY INFORMATION MEMORANDUM
IN CONNECTION WITH THE PROPOSED DISINVESTMENT OF
100% EQUITY SHAREHOLDING OF TYRE CORPORATION OF INDIA LTD.,
HELD BY THE GOVERNMENT OF INDIA “SALE”
SECTION 5: ELIGIBILITY CRITERIA
This Section discusses: a) Eligibility Criteria for Interested Parties
TYRE CORPORATION OF INDIA LTD.
PRELIMINARY INFORMATION MEMORANDUM PAGE 17
5 ELIGIBILITY CRITERIA FOR THE INTERESTED
PARTIES
5.1 Any individual (resident of India, non-resident Indian or a person of
Indian origin, as defined under Foreign Exchange Management Act, 1999),
trust, co-operative society, private limited company, public limited company,
sole proprietary firm or a partnership firm, all registered in India or a
company registered outside India, which is eligible to invest in India under
the laws of India (subject to such parties obtaining all statutory approvals
from GoI/FIPB/RBI etc. by themselves) (―Interested Parties or IP/s‖).
5.2 In case an IP is desirous to submit an EoI for the Company, it should
have a minimum net worth of Rs.250 Crore.
5.3 Consortium of IPs (―Consortium‖/ ―Consortia‖) may also participate in
the Sale. For a Consortium, the combined net worth of all the members of
the Consortium should meet net worth criteria as mentioned in 5.2 above for
the Company. The lead member of the Consortium should have minimum
net worth of Rs.125 Crore. Further, in the case of Consortium bid, minimum
equity contribution by an individual member to qualify as a member of the
consortium should be at least 20%. Members of one Consortium are not
eligible to be a member of another Consortium. Members of the Consortium
are also not permitted to participate as a sole IP for the proposed Sale.
5.4 IP should not have been convicted by a court of law or indicted/ have
any adverse order passed against them by any other regulatory authority in
any matter involving a grave offence and/ or which casts a doubt on its
ability to participate in the proposed Sale. Further such entities or their sister
concerns should not have any charge sheet filed against them by any agency
of Government of India or any court of law, which involves a matter
concerning security and integrity of India. The mere fact that an appeal
against any such order mentioned above is pending in any court of law or any
regulatory authority will not affect the disqualification.
5.5 EoIs by a Consortium shall not be considered if it leads to reduction in
competition. Decision of the Joint Secretary, Department of Disinvestment,
Ministry of Finance in this regard would be final.
5.6 There should be no change in the Consortium structure after submission
of the EoI right up to the stage of submitting the Financial Bid and also till
the signing of the Sale deed / share purchasing agreement, if the said
Consortium is declared as the successful bidder. If there are any changes in
the Consortium structure the DoD/Advisor reserves the right to restrict
further participation in the proposed Sale by the said Consortium.
5.7 Net worth for the purpose in case of a consortium should be calculated
as (% equity contribution of member 1* net worth of member 1 + % equity
contribution of member 2 * net worth of member 2 +……+ % equity
contribution of member 5 * net worth of member 5).
5.8 Net worth should be calculated on the basis of the latest audited
financial statements of an IP but in no event earlier than March 31, 2011. In
the case, the financial year of any IP is different than April to March every
year; the net worth shall be calculated as on March 31, 2011 or any
subsequent period for which its audited statements are available.
5.9 Where the financial statements are expressed in a currency other than
the Indian Rupee, the eligible amount as described above shall be computed
TYRE CORPORATION OF INDIA LTD.
PRELIMINARY INFORMATION MEMORANDUM PAGE 18
by taking the equivalent US Dollar at the exchange rates (as stipulated by
Reserve Bank of India) prevailing on the dates(s) of such financial statement.
5.10 GoI/DoD reserves the right to seek any additional indemnities,
warranties, representations or performance obligations from the bidders or
any of their group companies to GoI/DoD`s sole satisfaction.
TYRE CORPORATION OF INDIA LTD.
PRELIMINARY INFORMATION MEMORANDUM PAGE 19
PRELIMINARY INFORMATION MEMORANDUM
IN CONNECTION WITH THE PROPOSED DISINVESTMENT OF
100% EQUITY SHAREHOLDING OF TYRE CORPORATION OF INDIA LTD.,
HELD BY THE GOVERNMENT OF INDIA “SALE”
SECTION 6: INSTRUCTION FOR SUBMISSION OF EOI
This Section discusses: a) Instructions for Submission of EoI
TYRE CORPORATION OF INDIA LTD.
PRELIMINARY INFORMATION MEMORANDUM PAGE 20
6 INSTRUCTIONS FOR SUBMISSION OF EOI
6.1 The EoI, conforming to the conditions of this PIM shall be submitted
latest by 5.00 PM on August 13, 2012 at the office of SBI Capital Markets
Limited, the address of which is given below either by post, courier or hand
delivery (at the risk and cost of IPs) in a sealed envelope clearly marked
―Private and Confidential – Expression of Interest for Strategic Sale‖
with the identity and address of IPs:
Designated Official:
Suchismit Ghosh
Merger & Acquisition and Corporate Advisory
SBI Capital Markets Ltd.
202 Maker Tower- E
Cuffe Parade
Mumbai 400005, Maharashtra, India
Tel: 91-22-2217 8441 (D), Board Line: 91-22-2217 8300,
Fax: 91-22-2218 8332/6765
Email – [email protected]
Applications received either by fax or email will not be entertained.
6.2 The DoD/Advisor shall bear no responsibility for non-receipt of
EoIs/any other correspondence sent by post/e-mail/courier/fax.
6.3 The IPs/Consortium shall bear all costs associated with the preparation
and submission of the EoI. The DoD/Advisor shall not, under any
circumstances be responsible or liable for any such costs, whether direct,
incidental or consequential.
6.4 The IPs may note that payment towards Non-refundable Deposit
referred in clause 6.5.3 shall be acceptable by way of crossed demand
draft/pay order drawn on scheduled commercial bank approved by the
Reserve Bank of India, in favour of Pay and Accounts Officer, Ministry of
Finance, Department of Disinvestment, payable at New Delhi. Cheques
or any other form of payment will not be acceptable. Demand draft/pay
order issued by banks other than scheduled commercial bank approved by
the Reserve Bank of India will disqualify the EoI. For this purpose, whether
the bank is an approved bank as aforesaid, should be verified by the IPs
themselves, before submitting the EoI, to avoid inconvenience.
6.5 The EoI/s to be submitted shall consist of the following parts:
6.5.1 Letter in the format specified: for a sole Interested Party
(Annexure 2) or for a Consortium, (Annexure 3) on the letterhead of
the Sole Interested Party or on that of the Lead Member of the
Consortium.
6.5.2 Additional documents that need to be submitted as specified
in the above two documents:
6.5.2.1 Statement of Legal Capacity (As per Annexure 4) in
case of Sole IP and statement of legal capacity executed in
favour of the Lead Member of the Consortium by all other
members of the Consortium (as per Annexure 5).
6.5.2.2 In case of a Consortium, a Consortium Agreement
duly executed amongst each of the Consortium members.
The said agreement should clearly state the share of each
Consortium member in the said Consortium and also should
TYRE CORPORATION OF INDIA LTD.
PRELIMINARY INFORMATION MEMORANDUM PAGE 21
clearly outline the name of the IP, to whom the other
members of the Consortium agree to nominate as the leader
of the Consortium.
6.5.2.3 Request for Qualification (―RFQ‖), a format of
which is provided in Annexure 6.
6.5.3 A non-refundable deposit (―Initial Non-refundable
Deposit‖) of Rs. 1,00,000/- (Rupees One Lakh only) by demand
draft / pay order in favour of Pay and Accounts Officer, Ministry
of Finance, Department of Disinvestment, payable at New
Delhi, shall be payable by the IP at the time of submission of EoI.
EoI‘s submitted without the Initial Non-refundable Deposit shall be
rejected and the concerned IPs/Consortium shall not be eligible to
receive the CIM and the RFP.
6.6 Additionally, an indicative draft copy of the Confidentiality Undertaking
has been provided in Annexure 8. Shortlisted IPs will be asked to sign the
Confidentiality Undertaking before they can be provided with CIM and RFP
documents.
6.7 Enquiry: The GoI reserves the right, in their sole discretion, not to
respond to any questions raised or provide clarifications sought, if considered
inappropriate or prejudicial to do so. Nothing in this section shall be taken or
read as compelling or requiring the GoI to respond to any question or
provide any clarification. No extension of any time and date referred to in
this PIM shall be granted on the basis or grounds that the GoI has not
responded to any question or provided any clarification
6.8 Governing Law / Jurisdiction: The Sale and all matters incidental
thereto shall be governed by the laws of India. All disputes arising out of the
Sale shall be subject to the exclusive jurisdiction of the courts at New Delhi.
TYRE CORPORATION OF INDIA LTD.
PRELIMINARY INFORMATION MEMORANDUM PAGE 22
PRELIMINARY INFORMATION MEMORANDUM
IN CONNECTION WITH THE PROPOSED DISINVESTMENT OF
100% EQUITY SHAREHOLDING OF TYRE CORPORATION OF INDIA LTD.,
HELD BY THE GOVERNMENT OF INDIA “SALE”
SECTION 7: DISQUALIFICATIONS
This Section discusses: a) Conditions leading to Disqualification of an IP
TYRE CORPORATION OF INDIA LTD.
PRELIMINARY INFORMATION MEMORANDUM PAGE 23
7 DISQUALIFICATIONS
7.1 The DoD/Advisor shall not consider for the purpose of
qualification, any EoI which has been found to be incomplete in content or
attachments or authenticity.
7.2 Without prejudice, an IP may be disqualified and its EoI excluded
from further consideration for any of the reasons including without limitation
those listed below:
7.2..1 Material misrepresentation by an IP/ Consortium (any
Consortium member) in the EoI.
7.2.2 Failure by IP/ Consortium/ any Consortium member to
provide the information required to be provided in the EoI.
7.2.3 Submission of EoI in respect of any IP/ Consortium, where
such IP or member had already submitted an EoI or is a member of
another Consortium, which has already submitted an EoI.
7.2.4 The IPs/consortia of IPs not satisfying the eligibility and
requisite qualification criteria specified in section 5 and hence not
being eligible.
7.2.5 DoD/Advisor is not satisfied with ownership structure of
the bidder.
7.2.6 Failure to comply with the reasonable requests of
DoD/Advisor in relation to the Strategic Sale process.
7.2.7 If it is discovered at any time that a IP is subject matter of
winding up/insolvency or other proceedings of a similar nature
7.2.8 Any information regarding the IP which becomes known to
DoD/Advisor and which is detrimental to Strategic Sale process
and/or the interests of the Company.
7.2.9 Initiation or existence of any legal proceedings, by or against
the IP in respect of the Company, which proceeding may be
prejudiced by the participation of the IP in the selection process or
the Sale, e.g. Inspection by a IP of case files of the Company of
matters filed against that bidder
7.2.10 The IP or if the IP is a Consortium then any member of
such Consortium not being qualified to participate in the process
pursuant to the Government of India office memorandum No.
6/4/2001-DDII dated July 13, 2001 (refer Annexure 7) as amended
from time to time.
7.2.11 Non fulfillment of any other condition as listed in the PIM
7.3 If any information becomes known after the Interested Party has
been qualified to receive the CIM and RFP, which information would have
entitled the DoD/Advisor to reject or disqualify the EoI of relevant
IP/Consortium, the DoD/Advisor reserves the right to reject the
IP/Consortium at the time or at any time after such information becomes
known to the DoD/Advisor. Where such party is a consortium,
DoD/Advisor may disqualify the entire Consortium, even if it applied to only
one member of the Consortium.
TYRE CORPORATION OF INDIA LTD.
PRELIMINARY INFORMATION MEMORANDUM PAGE 24
7.4 DoD/Advisor determination that one or more of the events
specified in Clauses 7.1, 7.2 and 7.3 has occurred shall be final and
conclusive.
TYRE CORPORATION OF INDIA LTD.
PRELIMINARY INFORMATION MEMORANDUM PAGE 25
ANNEXURE 1: TYRE CORPORATION OF INDIA LIMITED
(DISINVESTMENT OF OWNERSHIP) ACT, 2007
TYRE CORPORATION OF INDIA LTD.
PRELIMINARY INFORMATION MEMORANDUM PAGE 26
ANNEXURE 2: FORMAT FOR LETTER OF EOI, IN CASE THERE IS A SOLE
IP
(To be typed on the letterhead of the Interested Party submitting the
EoI)
Reference No. ___________ Date ___________ To,
Mr. Suchismit Ghosh Vice President Mergers & Acquisitions and Corporate Advisory SBI Capital Markets Ltd. 202, Maker Tower ‗E‘ Cuffe Parade Mumbai 400 005
Sub: GLOBAL INVITATION OF EXPRESSION OF INTEREST FOR DISINVESTMENT OF 100% STAKE IN TYRE
CORPORATION OF INDIA LIMITED (“TCIL”)
Sir,
This is with reference to the Announcement dated July 13, 2012 inviting
Expression of Interest for Sale of 100% shares of TCIL.
As specified in the Announcement, we have read and understood the
contents of the Preliminary Information Memorandum (―PIM‖) and are
desirous of participating in the above disinvestment process, and for this
purpose:
We propose to submit our EOI in individual capacity as
__________________ (insert name of interested party)
We understand that 100 % equity stake of TCIL is proposed to be divested
and we are interested in bidding for the same.
We believe that we satisfy the eligibility criteria set out in relevant sections of
the PIM including the guidelines for qualification of bidders seeking to
acquire stakes in Public Sector Enterprises through the process of
disinvestment issued by the Government of India vide Department of
Disinvestment OM No.6/4/2001-DD-II dated 13th July, 2001 (refer
Annexure 7) and subsequent amendments/clarifications thereto.
We certify that in regard to matters other than security and integrity of the
country, we have not been convicted by a Court of law or indicted or adverse
orders passed by a regulatory authority which would cast a doubt on our
ability to manage the public sector unit when it is disinvested or which relates
to a grave offence that outrages the moral sense of the community.
We further certify that in regard to matters relating to security and integrity of
the country, we have not been charge-sheeted by any agency of the
Government or convicted by a Court of Law for any offence committed by
us or by any of our sister concerns.
We further certify that no investigation by a regulatory authority is pending
either against us or against our sister concerns or against our CEO or any of
our Directors/Managers/ employees.
We undertake that in case due to any change in facts or circumstances during
the pendency of the disinvestment process, we are attracted by the provisions
of disqualification in terms of the subject guidelines; we would intimate the
DoD/Advisor of the same immediately.
TYRE CORPORATION OF INDIA LTD.
PRELIMINARY INFORMATION MEMORANDUM PAGE 27
The Statement of Legal Capacity and Request for Qualification as per
formats given in Annexure 4 and Annexure 6 respectively of PIM, duly
signed by us are enclosed.
We shall be glad to receive further communication on the subject.
Yours faithfully,
Authorised Signatory
For and on behalf of the party
Enclosure:
1. Statement of Legal Capacity
2. Request for Qualification
TYRE CORPORATION OF INDIA LTD.
PRELIMINARY INFORMATION MEMORANDUM PAGE 28
ANNEXURE 3: FORMAT FOR LETTER OF EOI, IN CASE THERE IS A
CONSORTIUM OF IPS
(To be typed on the letterhead of the Lead Member of the Consortium
submitting the EoI)
Reference No. ___________ Date ___________ To,
Mr. Suchismit Ghosh Vice President Mergers & Acquisitions and Corporate Advisory SBI Capital Markets Ltd. 202, Maker Tower ‗E‘ Cuffe Parade Mumbai 400 005
Sub: GLOBAL INVITATION OF EXPRESSION OF INTEREST
FOR DISINVESTMENT OF 100% STAKE IN TYRE CORPORATION OF
INDIA LIMITED (“TCIL”)
Sir,
This is with reference to the Announcement dated July 13, 2012 inviting
Expression of Interest for Sale of 100% shares of TCIL.
As specified in the Announcement, we have read and understood the
contents of the Preliminary Information Memorandum (―PIM‖) and are
desirous of participating in the above disinvestment process, and for this
purpose:
We have formed/propose to form a consortium comprising of
____members as follows:
1. ______________(Insert name)/% of Shareholding in the
Consortium
2. ______________(Insert name)/% of Shareholding in the
Consortium
3. ______________(Insert name)/% of Shareholding in the
Consortium
We understand that 100% equity stake of TCIL is proposed to be divested
and we are interested in bidding for the same.
We believe that our consortium/proposed consortium satisfies the eligibility
criteria set out in relevant sections of the PIM including the guidelines for
qualification of bidders seeking to acquire stakes in Public Sector Enterprises
through the process of disinvestment issued by the Government of India
vide Department of Disinvestment OM No.6/4/2001-DD-II dated July 13,
2001 (refer Annexure 7) and subsequent amendments/clarifications thereto.
We certify that in regard to matters other than security and integrity of the
country, we have not been convicted by a Court of law or indicted or adverse
orders passed by a regulatory authority which would cast a doubt on our
ability to manage the public sector unit when it is disinvested or which relates
to a grave offence that outrages the moral sense of the community.
We further certify that in regard to matters relating to security and integrity of
the country, we have not been charge-sheeted by any agency of the
Government or convicted by a Court of Law for any offence committed by
us or by any of our sister concerns.
TYRE CORPORATION OF INDIA LTD.
PRELIMINARY INFORMATION MEMORANDUM PAGE 29
We further certify that no investigation by a regulatory authority is pending
either against us or against our sister concerns or against our CEO or any of
our Directors/Managers/ employees.
We undertake that in case due to any change in facts or circumstances during
the pendency of the process of participation in the proposed Sale, we are
attracted by the provisions of disqualification in terms of the PIM, we would
intimate the DoD/Advisor of the same immediately.
The Statement of Legal capacity and Request for Qualification as per formats
given in Annexure 5 and Annexure 6 respectively of PIM, duly signed by
representative members who jointly satisfy the eligibility criteria, are enclosed.
Certified true copy of the Consortium Agreement between the consortium
members is also enclosed.
We shall be glad to receive further communication on the subject.
Yours faithfully,
Authorised Signatory
For and on behalf of the Consortium
Enclosure:
1. Statement of Legal Capacity
2. Request for Qualification
3. Certified true copy of the Consortium Agreement between the
Consortium members.
TYRE CORPORATION OF INDIA LTD.
PRELIMINARY INFORMATION MEMORANDUM PAGE 30
ANNEXURE 4: STATEMENT OF LEGAL CAPACITY FOR SOLE IP
(To be forwarded on the letterhead of the interested party submitting the
EOI)
Reference No. ___________ Date ___________ Mr. Suchismit Ghosh Vice President Mergers & Acquisitions and Corporate Advisory SBI Capital Markets Ltd. 202, Maker Tower ‗E‘ Cuffe Parade Mumbai 400 005
Sub: GLOBAL INVITATION OF EXPRESSION OF INTEREST FOR DISINVESTMENT OF 100% STAKE IN TYRE
CORPORATION OF INDIA LIMITED (―TCIL”) Sir,
This is with reference to the Announcement dated July 13, 2012 inviting
Expression of Interest for Sale of 100% shares of TCIL.
We have read and understood the contents of the PIM and the
Announcement and pursuant to this hereby confirm that:
We satisfy the eligibility criteria laid out in the PIM and the Announcement.
We have agreed that _____________ (insert individual‘s name) will act as
our representative on our behalf and has been duly authorized to submit the
EoI. Further, the authorized signatory is vested with requisite powers to
furnish such letter and Request for Qualification and authenticate the same.
Yours faithfully,
Authorised Signatory
For and on behalf of the interested party
TYRE CORPORATION OF INDIA LTD.
PRELIMINARY INFORMATION MEMORANDUM PAGE 31
ANNEXURE 5: STATEMENT OF LEGAL CAPACITY FOR CONSORTIUM
MEMBERS
(To be forwarded on the letterhead of each member of the consortium
submitting the EOI)
Reference No. ___________ Date ___________ Mr. Suchismit Ghosh Vice President Mergers & Acquisitions and Corporate Advisory SBI Capital Markets Ltd. 202, Maker Tower ‗E‘ Cuffe Parade Mumbai 400 005
Sub: GLOBAL INVITATION OF EXPRESSION OF INTEREST FOR DISINVESTMENT OF 100% STAKE IN TYRE
CORPORATION OF INDIA LIMITED (―TCIL”) Sir,
This is with reference to the Announcement dated July 13, 2012 inviting
Expression of Interest for Sale of 100% shares of TCIL.
We have read and understood the contents of the PIM and the
Announcement and pursuant to this hereby confirm that:
We satisfy the eligibility criteria laid out in the PIM and the Announcement.
We are a member of the consortium (constitution of which has been
described in the Expression of Interest), which jointly satisfies the eligibility
criteria as detailed in the PIM.
We have agreed that ________ (insert member‘s name) will act as the lead
member of our consortium.
We have agreed that _____________ (insert the name of the individual)
chosen as representative of our consortium and on our behalf and has been
duly authorized to submit the EoI. Further, the authorized signatory is
vested with requisite powers to furnish such letter and Request for
Qualification and authenticate the same.
Yours faithfully,
Authorised Signatory
For and on behalf of member
TYRE CORPORATION OF INDIA LTD.
PRELIMINARY INFORMATION MEMORANDUM PAGE 32
ANNEXURE 6: FORMAT OF REQUEST FOR QUALIFICATION
(To be submitted in respect of interested party/each member of the
consortium)
Name of the interested Party(ies)/Member(s)_____________________
1. Constitution (Tick, wherever applicable)
i. Public Limited Company
ii. Private Limited Company
iii. Others, if any (Please specify)
If the interested party is a foreign company/ OCB, specify list of statutory
approvals from GoI/ RBI/ FIPB applied for/ obtained/ awaited
2. Sector (Tick, wherever applicable)
i. Public Sector
ii. Joint Sector
iii. Others, If any (Please specify)
3. Memorandum and Articles of Association/Document of
Constitution, i.e., Partnership Deed, Trust Deed, etc., as may be
applicable.
4. A certificate duly signed by our Company Secretary/ any other
officer in charge of legal affairs, stating that we are eligible to participate
in the proposed Sale in terms of Clause ______ of our Memorandum
and Articles of Association/_____________ name of Document of
Constitution, viz., Partnership Deed, Trust Deed, etc. as may be
applicable. (specific reference to the said provision may be drawn).
5. Details of Shareholding
6. Audited Financial Statements/Annual Reports for the previous
three financial years.
(Notes: (i) In addition to the Audited Financial Statements, IPs
who are natural persons, i.e., individuals, shall also provide proof of
identity (copy of passport/ PAN card/Driving License), income tax and
wealth tax filings and assessment orders for the last three years, a letter
from a bank establishing his identity, details of bank account statements
for the last three years for the account maintained with them and
duration of banking relationship and a certificate from a chartered
accountant stating his/her networth as defined in the Eligibility criteria.
(ii) For IPs incorporated during the last 2 years which, subject to
compliance with all applicable laws, do not have audited financial
statements as on 31st March, 2011, Balance Sheet and Profit & Loss
Account for 31st March, 2011 (if audit has been completed) or
provisional Balance Sheet and Profit & Loss Account of the IP for 31st
March, 2011 as certified by its Board of Directors/ any other governing
body should be submitted.)
7. Role/ Interest of each Member in the Consortium (if applicable)
8. Nature of business/products dealt with.
9. A profile containing information on Company/Group‘s area of
operations
TYRE CORPORATION OF INDIA LTD.
PRELIMINARY INFORMATION MEMORANDUM PAGE 33
10. Date & Place of incorporation
11. Date of commencement of business
12. Full address including phone No./fax No. i. Registered Office
ii. Head Office
13. Address for correspondence
14. Salient features of financial performance for the last three years
15. Basis of eligibility for participation in the process (Please mention details
of your eligibility) as under:
a. Please attach most recent Audited Statement of Accounts/Annual
Report.
b. Additionally, please provide a chartered account/auditor certificate
certifying the Net Worth as defined in the Eligibility criteria.
16. Please provide details of all contingent liabilities that, if materialised, that
have or would reasonably be expected to have a material adverse affect
on the business, operations (or results of operations), assets, liabilities
and/or financial condition of the Company, or other similar business
combination or sale.
17. Contact Person(s):
i. Name:
ii. Designation:
iii. Phone No.:
iv. Mobile No.:
v. Fax No.:
vi. Email:
Yours faithfully,
Authorised Signatory
For and on behalf of the
(party/member)
Authorised Signatory
For and on behalf of the consortium
Place :
Date :
Note: Please follow the order adopted in the Format provided. If the interested party is
unable to respond to a particular question/ request, the relevant number must be
nonetheless be set out with the words “No response given” against it.
TYRE CORPORATION OF INDIA LTD.
PRELIMINARY INFORMATION MEMORANDUM PAGE 34
ANNEXURE 7: OFFICE MEMORANDUM NO. 6/4/2001-DD-II
No. 6/4/2001-DD-II Government of India
Ministry of Disinvestment Block 14, CGO Complex
New Delhi. Dated 13th July, 2001.
OFFICE MEMORANDUM
Sub: Guidelines for qualification of Bidders seeking to acquire
stakes in Public Sector Enterprises through the process of disinvestment
Government has examined the issue of framing comprehensive and
transparent guidelines defining the criteria for bidders interested in PSE-
disinvestment so that the parties selected through competitive bidding could
inspire public confidence. Earlier, criteria like net worth, experience etc. used
to be prescribed. Based on experience and in consultation with concerned
departments, Government has decided to prescribe the following additional
criteria for the qualification / disqualification of the parties seeking to acquire
stakes in public sector enterprises through disinvestment:
(a) In regard to matters other than the security and integrity of the
country, any conviction by a Court of Law or indictment / adverse order
by a regulatory authority that casts a doubt on the ability of the bidder to
manage the public sector unit when it is disinvested, or which relates to a
grave offence would constitute disqualification. Grave offence is defined
to be of such a nature that it outrages the moral sense of the
community. The decision in regard to the nature of the offence would
be taken on case-to-case basis after considering the facts of the case and
relevant legal principles, by the Government.
(b) In regard to matters relating to the security and integrity of the
country, any charge-sheet by an agency of the Government / conviction
by a Court of Law for an offence committed by the bidding party or by
any sister concern of the bidding party would result in
disqualification. The decision in regard to the relationship between the
sister concerns would be taken based on the relevant facts and after
examining whether the two concerns are substantially controlled by the
same person/persons.
(c) In both (a) and (b), disqualification shall continue for a period that
Government deems appropriate.
(d) Any entity, which is disqualified from participating in the
disinvestment process, would not be allowed to remain associated with it
or get associated merely because it has preferred an appeal against the
order based on which it has been disqualified. The mere pendency of
appeal will have no effect on the disqualification.
(e) The disqualification criteria would come into effect immediately and
would apply to all bidders for various disinvestment transactions, which
have not been completed as yet.
(f) Before disqualifying a concern, a Show Cause Notice why it should not
be disqualified would be issued to it and it would be given an opportunity
to explain its position.
TYRE CORPORATION OF INDIA LTD.
PRELIMINARY INFORMATION MEMORANDUM PAGE 35
(g) Henceforth, these criteria will be prescribed in the Announcements
seeking Expression of Interest (EOI) from the interested parties. The
interested parties would be required to provide the information on the
above criteria, along with their Expressions of Interest (EOI). The
bidders shall be required to provide with their EOI an undertaking to the
effect that no investigation by a regulatory authority is pending against
them. In case any investigation is pending against the concern or its
sister concern or against its CEO or any of its
Directors/Managers/employees, full details of such investigation
including the name of the investigating agency, the charge/offence for
which the investigation has been launched, name and designation of
persons against whom the investigation has been launched and other
relevant information should be disclosed, to the satisfaction of the
Government. For other criteria also, a similar undertaking shall be
obtained along with EoI.
-sd/-
(A.K. Tewari)
Under Secretary to the Government of India.
TYRE CORPORATION OF INDIA LTD.
PRELIMINARY INFORMATION MEMORANDUM PAGE 36
ANNEXURE 8: CONFIDENTIALITY UNDERTAKING
[ON RS.100 STAMP PAPER]
CONFIDENTIALITY UNDERTAKING
This CONFIDENTIALITY UNDERTAKING ("Undertaking") is made
on this ………. day of …………., 2012.
BY
(……………………………………………………………………………
……) insert name of the Interested Party), a company incorporated under
the laws of ________________________(insert name of the country), with
its registered office
at__________________________________________________________
____________________________________________________________
________________________________________________, (Insert
address) (the "IP ") which expression shall unless repugnant or contrary to
the context or meaning thereof include its successors and assigns;
IN FAVOUR OF:
Tyre Corporation of India Limited, a company incorporated under the
Companies Act, 1956, as amended, having its office at Leslie House, 19,
Jawaharlal Nehru Road, Kolkata 700087 (the "Company‖ or ―TCIL‖),
which expression shall unless repugnant or contrary to the context or
meaning thereof include its successors and assigns;
Department of Disinvestment, Ministry of Finance, Government of India
having its office at Block No. 11, C.G.O Complex, Lodhi Road, New Delhi
110003 (the ―DoD‖) and
SBI Capital Markets Limited, a company incorporated under the Companies
Act, 1956, as amended, with its registered and corporate office at 202, Maker
Tower ‗E‘, Cuffe Parade, Mumbai 400 005 (the "Advisor").
WHEREAS:
1 The Advisor, on behalf of DoD/Company, issued an Announcement
for Invitation of Global Expression of Interest(s) for outright sale of
TCIL on July 13, 2012 and issued a Preliminary Information
Memorandum (―PIM‖) containing formalities and procedure for
submission of an Expression of Interest (―EoI‖).
2 The IP has, in compliance with the terms of the PIM, agreed to submit
this Undertaking in the format specified by the Advisor;
3 In the context of the IP‘s interest in the proposed Sale, the Disclosing
Party (as defined below) may disclose Confidential Information to the
Receiving Party (as defined below) to enable the IP to evaluate the
proposed Sale.
NOW, THEREFORE, in consideration for receiving the Confidential
Information, the IP hereby executes this Undertaking and undertakes,
represents, warrants, covenants and agrees to the terms and conditions
contained herein:
TYRE CORPORATION OF INDIA LTD.
PRELIMINARY INFORMATION MEMORANDUM PAGE 37
1. In this Undertaking, (including the recitals), the following shall mean:
1.1 "Confidential Information" means and includes but not limited
to any and all information, documents and materials whether written,
oral or otherwise, concerning the business, operations, prospects,
finances, or other affairs of the Company, its affiliates or associates
(which includes, without limitation, documents delivered in
connection with a due diligence investigation, information relating to
the Company, agreements with business partners, market and
company-specific data, know-how, graphs, drawing, customer lists,
current and anticipated customer requirements, price lists and other
end-user pricing related information, settlement rates, market studies,
systems, structures, historical financial statements, business plans,
financial projections and budgets, historical and projected sales,
capital spending budgets and plans, the names and backgrounds of
personnel, any information memorandum, request for proposal,
drafts of agreement of sale, or other materials prepared in
connection with the proposed Sale, howsoever documented, that has
been or may hereafter be provided or shown to the Receiving Party
by the Disclosing Party or is otherwise obtained from review of the
Disclosing Party‘s documents or property or discussions with the
Disclosing Party by the Receiving Party irrespective of the form of
the communication, and also includes all notes, analyses,
compilations, studies, summaries, and other material prepared by the
Receiving Party containing or based, in whole or in part, on any
information included in the foregoing.
Notwithstanding the foregoing, the following information will not constitute
"Confidential Information" for purposes of this Undertaking:
o Information which the Receiving Party can prove was already in
the possession of the Receiving Party and was available to the
Receiving Party on a non-confidential basis prior to its disclosure
to the Receiving Party by the Disclosing Party;
o Information which is obtained by the Receiving Party from a third
Person who, in so far as is known to the Receiving Party, is not
prohibited from disclosing the information to the Receiving party
under a contractual, legal or fiduciary obligation to the Disclosing
Party; and
o Information which is or becomes generally available to the public
otherwise than as a result of a breach of this Undertaking by the
Receiving Party.
The decision of the Company/ DoD on whether any information qualifies
within the exceptions as stated above shall be final, conclusive and binding.
1.2 ―CIM‖ means a Confidential Information Memorandum containing the
elaborate details of the Company and other information relevant to the
proposed Sale.
1.3 ―Consortium‖ mean a body comprising Persons who have come
together and agreed or formed an understanding (in writing) to act in concert
for the proposed Sale.
1.4 "Disclosing Party" means the Advisor, the Company, the DoD and/or
their respective Representatives.
TYRE CORPORATION OF INDIA LTD.
PRELIMINARY INFORMATION MEMORANDUM PAGE 38
1.5 ―Interested Party‖ or ―IP‖ means the parties either individually or as a
Consortium, as the case may be, who are interested in the proposed Sale.
1.6 ―Governmental Authority" means any governmental or regulatory
authority, government, ministry or department in India or other rule or
regulation making entity having jurisdiction or acting on behalf of the
Republic of India or any political subdivision thereof.
1.7 ―Lead Member‖ means such member, who satisfies the eligibility criteria
listed in the PIM document dated July, 2012 and in whose favour a Power of
Attorney by other members of the Consortium giving authority for
representing the Consortium in all the matters concerning the proposed Sale
has been executed.
1.8 "Person" means any individual, company, firm, association, trust, or any
other organization or entity (including the Government and any
governmental or political subdivision).
―proposed Sale‖ means outright sale of TCIL.
"Receiving Party" means the IP and/or their respective Representatives.
1.11 "PIM" means the Preliminary Information Memorandum document
issued by the Advisor on behalf of the DoD and Company.
1.12 "Representative(s)" includes the directors, officers, employees, agents,
consultants, advisors, or other representatives, including legal counsel,
accountants and financial advisors and also includes the Representatives of
the Representatives of any Person.
For the purpose of this Undertaking it is clearly understood that IP shall be
deemed to include its Representatives, and/or any Person acting on its
behalf. It is also understood that the constitution of the IP may be in the
form of a Consortium, in which case, the members of the said Consortium
will also be considered as the IP.
The Receiving Party will use the Confidential Information only to evaluate
the proposed Sale and the Receiving Party will not directly or indirectly use
the Confidential Information for any other purpose or in any way detrimental
to the Disclosing Party.
In consideration of the Disclosing Party providing the Receiving Party with
Confidential Information, by the IP's execution of this Undertaking, the IP,
for itself and on behalf of any other Receiving Party, agrees that all of the
Confidential Information shall be held and treated by the Receiving Party in
strict confidence. The IP agrees -
4.1 to disclose Confidential Information only to its Representatives who
need to know the Confidential Information for the purposes of an evaluation
of the proposed Sale and each such Representative will be informed and
advised in writing by the IP of the confidential nature of such information
and the contents of and the obligations under this Undertaking.
4.2 to satisfy itself that each such Representative will hold and treat the
Confidential Information in confidence and act in accordance therewith. The
IP agrees that the Confidential Information shall not, without the Company‘s
prior written consent, be disclosed by the IP and/or its Representative, in any
manner whatsoever, in whole or in part, to any third Person, and shall not be
TYRE CORPORATION OF INDIA LTD.
PRELIMINARY INFORMATION MEMORANDUM PAGE 39
used by the IP or each Representative other than in connection with an
evaluation of the proposed Sale.
4.3 that the Company, DoD and/ or the Advisor shall have the right to
deny the Confidential Information Memorandum (CIM) and Request for
Proposal (RFP) to the IP and preclude the IP from participating in the
process for the proposed Sale in the event the IP commits or attempts to
commit any breach of the terms and conditions of this Undertaking or the
PIM.
The IP hereby indemnifies and agrees to keep indemnified and hold the
Advisor, DoD and the Company harmless from any breach or attempted
breach of this Undertaking.
Except as expressly permitted by a definitive agreement, if any, entered into
by the IP, the Consortium Members and/or any company formed and
promoted by them for the proposed Sale, the Receiving Party will not directly
or indirectly disclose to any Person (including another prospective purchaser
who has been provided Confidential Information) the fact that the
Confidential Information has been made available to the Receiving Party or
that the Receiving Party has inspected any portion of the Confidential
Information. Except with the prior written consent of the Company, and
except as expressly permitted by a definitive agreement, if any, the Receiving
Party will not directly or indirectly disclose to any Person the fact that any
discussions or negotiations are taking place concerning the proposed Sale,
including the status and content of such discussions or negotiations.
On acquiring the Confidential Information on the terms stated in this
Undertaking or otherwise, the Receiving Party shall comply with all
applicable law, and the IP hereby jointly and severally indemnifies and agrees
to hold the DoD, Advisor and the Company indemnified and harmless
(without prejudice to Clause 14 set forth below) against all and any
consequences arising from any violation by the Receiving Party of such
applicable laws.
If the Receiving Party is requested or becomes legally compelled (by oral
questions, summons, interrogatories, requests for information or documents,
subpoena, civil or criminal investigative demand, or similar process) or is
required by a Government Authority and/or regulatory body or stock
exchange (including any self regulated organisation) to make any disclosure
that is prohibited under this Undertaking or any similar undertaking or
agreement, the Receiving Party will provide the Advisor and the Company
with prompt written notice of such request, and such notice shall be
accompanied by a written opinion of the IP‘s legal counsel that the Receiving
Party is legally compelled, or compelled by a regulatory body or is otherwise
legally required to make such disclosure, the extent of such disclosure that the
Receiving Party is legally compelled to make, and the time period within
which the Receiving Party is required to make such disclosure, or else stand
liable for contempt or suffer other censure or penalty, so that the DoD,
Advisor or the Company may seek an appropriate injunction, protective
order or other appropriate remedy. Subject to the foregoing, if no appropriate
injunction, protective order or other appropriate remedy is forthcoming,
within the time period within which the Receiving Party is required to make
such disclosure, the Receiving Party may furnish that portion (and only that
portion) of the Confidential Information that, in the written opinion of the
IP's legal counsel, the Receiving Party is legally compelled, or compelled by a
regulatory body or is otherwise legally required to disclose, or else stand liable
for contempt or suffer other censure or penalty; provided, however, that the
TYRE CORPORATION OF INDIA LTD.
PRELIMINARY INFORMATION MEMORANDUM PAGE 40
Receiving Party must use best efforts to obtain reliable assurance that
confidential treatment will be accorded to any Confidential Information so
disclosed.
The confidentiality obligations contained in this Undertaking may be
amended, modified or superseded upon by the IP and/or any company
formed and promoted by them by executing a definitive agreement for the
proposed Sale, but shall be without prejudice to any of the DoD‘s, Advisor‘s
or the Company's rights in respect of any breach of this Undertaking which
may have occurred prior to such amendment, modification or supersession.
In case the IP decides not to proceed with the proposed Sale or if the DoD,
Advisor or the Company does not wish the IP to participate or proceed in
the process for the proposed Sale any further, the obligations of the IP under
this Undertaking shall not expire until such part of the Confidential
Information or whole of it becomes lawfully available in the public domain.
Upon the successful IP executing definitive agreements for the proposed Sale
the obligations of IP in this Undertaking shall expire except to the extent
contained in such definitive agreements.
The Company/DoD may elect at any time to terminate further access by the
Receiving Party to any Confidential Information in connection with its
evaluation of the proposed Sale. After any such termination by the
Company/ DoD or after the decision to not proceed with the proposed Sale,
the IP-
11.1 will promptly deliver to the concerned Disclosing Party, all
Confidential Information including all documents or other materials
furnished by such Disclosing Party to the Receiving Party, together with all
copies, notes and summaries thereof in the possession or under the control
of the Receiving Party, and
11.2 will destroy materials generated by the Receiving Party that include or
refer to any part of the Confidential Information, without retaining a copy of
any such material; or
11.3 alternatively, if the Advisor or the Company request or give prior
written consent to the IP's request, the IP will destroy or cause to be
destroyed all Confidential Information in the possession or under the control
of the Receiving Party. Any such destruction pursuant to the foregoing must
be confirmed by the IP in writing to each of the DoD, Advisor and the
Company (such confirmation must include a list of the destroyed materials).
The IP acknowledges that the return of the Confidential Information and the
return or destruction of the Confidential Information shall not release the
Receiving Party from its obligations under this Undertaking.
The Representatives shall also be required to deliver up to Disclosing Party or
destroy or expunge copies of any analysis, compilations, studies or meeting
notes or any other documents that are subject to client-attorney/advisors
privilege governing such Representatives. In case of any such analysis,
compilations, studies or meeting notes or any other documents that are
required to be preserved for corporate governance purposes; then such
retained information/material will be kept confidential subject to the terms
hereof.
Notwithstanding anything in this Clause, in the event that the Receiving Party
is required to maintain any records or copies by any law or regulation of the
jurisdiction to which such Receiving Party is subject to, such Receiving Party
TYRE CORPORATION OF INDIA LTD.
PRELIMINARY INFORMATION MEMORANDUM PAGE 41
may retain copies of the Disclosed Information and the Receiving Party may
retain any analysis, compilations, studies or meeting notes or any other
documents, that include or refer to any part of the Confidential Information,
if the same are required to be preserved for corporate governance purposes,
provided however, that in such event, the Receiving Party shall continue to
be bound by the terms of this Undertaking.
The Receiving Party shall not deal (except in the ordinary course of its
business) with any officer, director or employee of the Company regarding
the business, operations, prospects or finances of the Company, without the
Advisor‘s prior written consent, unless otherwise agreed to in an executed
agreement entered into in connection with the proposed Sale by the IP and
the Consortium Members. It is understood that the Advisor will arrange for
appropriate contacts for due diligence purposes in connection with the Sale.
Unless otherwise agreed to by the Advisor in writing (i) all communications
regarding the proposed Sale, (ii) any requests for additional information, (iii)
any requests for management meetings, and (iv) any queries regarding the
proposed Sale, will be directed exclusively to the Advisor. However, if the
Receiving Party is called upon by the Company for any discussions, the
Receiving Party will do so or meet by the Company only after duly informing
the Advisor in writing.
The IP agrees that the Company/DoD reserves the right, in its sole
discretion to modify the process of the proposed Sale in any part, or to vary
any terms at any time without prior notice to the IP, to reject any and all
proposals made by the Receiving Party with regard to the proposed Sale and
to terminate discussions and negotiations with the Receiving Party at any
time. Without limiting the preceding sentence, nothing in this Undertaking
(i) requires either the IP to enter into the proposed Sale or to negotiate such
proposed Sale for any specified period of time or (ii) requires the DoD,
Advisor or the Company to enter into an agreement or an understanding, or
prohibits the DoD, Advisor or the Company from entering into any
agreement or understanding, for proceeding with the proposed Sale with any
other Person.
The IP understands, acknowledges and agrees that the Disclosing Party retain
the right to determine, in their sole discretion, the information, properties
and personnel of the Company or the Advisor that they wish to make
available to the Receiving Party and the Disclosing Party does not make any
representations or warranties, express or implied, as to the accuracy or
completeness of the Confidential Information and shall have no liability to
the Receiving Party resulting from the IP's use of the Confidential
Information. The IP also agrees that if it determines to proceed with the
proposed Sale, its determination will be based solely on its own investigation,
analysis, and assessment of its investment, or the terms of a definitive
agreement, if any. Moreover, where such a definitive agreement is proposed
to be entered into, unless and until such an agreement is entered into, the
Company will not be under any legal obligation of any kind with respect to
the proposed Sale except for the matters specifically agreed to in this
Undertaking or in another written and duly executed agreement.
The IP hereby indemnifies and agrees to hold the Disclosing Party
indemnified and harmless from all and any damages, losses, costs, or
liabilities (including legal fees and the cost of enforcing this indemnity) arising
out of or resulting from any unauthorized use or disclosure by any Receiving
Party of the Confidential Information or other violation of this Undertaking
(notwithstanding that such a Receiving Party may not be party to this
Undertaking) or of any similar undertaking or agreement. In addition,
TYRE CORPORATION OF INDIA LTD.
PRELIMINARY INFORMATION MEMORANDUM PAGE 42
because an award of money damages (whether pursuant to the foregoing
sentence or otherwise) would be inadequate for any breach of this
Undertaking or any similar undertaking or agreement by the Receiving Party
and any such breach would cause the Disclosing Party irreparable harm, the
IP also agrees that, in the event of any breach or threatened breach of this
Undertaking or such similar undertaking or agreement, the Advisor or the
Company will also be entitled, without the requirement of posting a bond or
other security, to equitable relief, including injunctive relief and specific
performance. Such remedies will not be the exclusive remedies for any
breach of this Undertaking but will be in addition to all other remedies
available at law or equity to the Advisor and/or the Company.
The IP understands, acknowledges, confirms and agrees that each of the
DoD, Company and the Advisor are beneficiaries under this Undertaking.
The IP further agrees and confirms that each of the DoD, Company and the
Advisor, will be entitled to and may enforce, either individually or jointly, the
obligations imposed on the Receiving Party under this Undertaking.
The IP understands, acknowledges, confirms and agrees that in case the IP
commits a breach of any term or condition of this Undertaking or any such
Agreement, the DoD, the Company and/ or the Advisor reserves the right to
deny such IP an access to Request for Proposal (RFP) or to reject the RFP
such IP may submit or preclude such IP from participating in the process for
the proposed Sale.
The terms of this Undertaking may be varied only with the DoD‘s,
Company‘s and the Advisor‘s prior written agreement. This Undertaking
shall be effective as of the date first above given on the first page of this
Undertaking.
This Undertaking shall be governed by and construed in accordance with the
substantive laws of India without giving effect to its conflict of law principles.
All notices required or permitted to be given hereunder shall be in writing
and shall be valid and sufficient if dispatched by registered airmail, postage
prepaid, or by telex, cable, facsimiles or e-mail as follows.
If the notice is to the Advisor, to:
Designated Official
M & A & Corporate Advisory
SBI Capital Markets Limited
202, Maker Tower ‗E‘,
Cuffe Parade,
Mumbai 400 005
Tel no.: 91-22-22178300
Fax : 91-22-2218 8332/6765 Email: [email protected]
With a copy to:
Designated Official
Tyre Corporation of India Limited,
Leslie House
19, Jawaharlal Nehru Road
Kolkata 700087
AND
Designated Official
Department of Disinvestment, Ministry of Finance
TYRE CORPORATION OF INDIA LTD.
PRELIMINARY INFORMATION MEMORANDUM PAGE 43
Government of India
Block No. 11, C.G.O Complex,
Lodhi Road
New Delhi 110003
If the notice is to the Company, to:
Designated Official of TCIL, at the address given hereinabove
With a copy to:
Designated Official of Department of Disinvestment, Ministry of Finance, Government of India at the address given hereinabove
AND
Designated Official of Advisor at the address given hereinabove
If the notice is to the Department of Disinvestment, Ministry of Finance, Government of India, to:
Designated Official of Department of Disinvestment, Ministry of Finance, Government of India, at the address given hereinabove
With a copy to:
Designated Official of TCIL, at the address given hereinabove
AND
Designated Official of Advisor at the address given hereinabove
If the notice is to the IP:
Name:
Designation:
Organisation name and address:
Tel no.
fax no.:
E-mail address:
Any of the IP, the DoD, the Company or the Advisor may change its address
by a notice given to the other in the manner set forth above. All notices and
other communications shall be deemed to have been duly given (i) on the
expiry of fourteen days after posting, if transmitted by registered airmail or
(ii) on the date immediately after the date of transmission with confirmed
answer back if transmitted by telex, cable, facsimile or e-mail, whichever shall
first occur.
IN WITNESS WHEREOF, this Undertaking has been executed by the duly
authorized representative of the IP [in case of a Consortium of IPs, by the
Lead Member of the Consortium for itself and for and on behalf of each
member of the Consortium] on the date and year first hereinabove written.
Witnessed by: (Name of IP)