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Aug 19, 2013, 06.42 PM IST | Source: CNBC-TV18

RBI capital control rule not to impact Cooper deal: Apollo

Apollo Tyres on Monday said that the Reserve Bank’s (RBI) notification to reduce the limit on overseas direct investments (ODI) will not foil the USD 2.5 billion Cooper Tire acquisition, reports CNBC-TV18’s Ronojoy Banerjee.

Apollo Tyres on Monday said that the Reserve Bank’s (RBI) notification to reduce the limit on overseas direct investments (ODI) will not foil the USD 2.5 billion Cooper Tire acquisition, reports CNBC-TV18’s Ronojoy Banerjee. As a measure to stem the rupee fall, the central bank had reduced the limit of ODI under the automatic route to 100 percent of the acquirer’s networth.

Also read: Apollo Tyres Q1 net up higher-than-expected 20% to Rs 166cr

Analysts do not feel that the Apollo-Cooper deal will be impacted. The proposal and documentation under the Foreign Exchange Management Act (FEMA) rules have already been completed prior to August 14, when the RBI notification came out.

Also, Apollo Tyres has raised only USD 450 million on their own books. The remaining USD 2.1 billion is going to be on the books of Cooper Tyres. So, even as per the RBI notification they would not require any approval from the RBI.

People associated with the deal are expecting it to go through in about two months. Currently, they are awaiting statutory approvals from various authorities.

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