Hinduja Group’s commercial vehicle manufacturer Ashok Leyland has increased its shareholding in the British bus maker Optare Plc to 75.1 per cent. The flagship company of the Hinduja Group had initially picked up 26 per cent stake in the company last year. The current stake increase, which is part of a refinancing transaction, will see Ashok Leyland forking out a little over £4 million or Rs 33 crore.
The deal allows “Optare to become fully integrated in Ashok Leyland’s ambitious global bus strategy which seeks to maintain and improve on its top five place among the world’s bus makers. The refinancing is being achieved by providing a guarantee to support Optare’s re-banking which will provide a substantially improved working capital facility for the business. At the same time, Ashok Leyland will increase its stake to 75.1 per cent of the company’s share capital through a placing of shares raising new equity,” according to a company statement.
Optare manufactures low-floor integral buses and employs around 500 people across the group, principally at its new assembly facility at Sherburn-in-Elmet, Yorkshire.
“We see this as an important element in realising our vision of being among the top five bus manufacturers globally. Through leveraging the synergies of the two companies, we are confident that going forward, we will be able to accelerate technology sharing, develop future-ready products and increase our global footprint to fast-track our growth in volumes,” said Vinod Dasari, managing director of Ashok Leyland.
Shares of Ashok Leyland were trading on the BSE at Rs 21.1 a piece at 1:45 pm on Wednesday, down 2.54 per cent. Ashok Leyland reported 53 per cent growth in sales in FY11 to Rs 11,117 crore, with net profit at Rs 631 crore.
Part of the diversified Hinduja Group, Chennai-based Ashok Leyland sells approximately 94,000 vehicles and about 17,000 engines annually, and is the second largest commercial vehicle company in India in the medium and heavy commercial vehicle segment, with a market share of about 25.7 per cent in 2010-11. It is a leader in the Indian bus market, selling over 23,000 buses annually. The company has seven plants in India, one in the Czech Republic and one in the Middle East, with a current global capacity of over 150,000 buses and trucks.