The cash rich Essar Global (EGL), the holding company of the Essar group, is planning to pick up a stake worth Rs 590 crore in Mmmbai-based Asia MotorWorks Holdings Ltd (AMWHL), a heavy commercial vehicle manufacturer. The company was founded in 2002 by Anirudh Bhuwalka, the nephew of Essar Group Chairman Shashi Ruia’s wife, reports Business Standard. The money is being raised for expansion of manufacturing capacity.

The issue will be in the form of convertible debentures/preference shares which would be compulsorily convertible into equity shares within a period of ten years, the report said. It further said that the entire equity of AMWHL, consisting of 50,000 shares, are held by Anirudh Bhuwalka (99.88 pr cent) and six individuals (with 0.02 per cent each). The proposal has been submitted for Foreign Investment Promotion Board (FIPB) clearance as Essar Global is registered in Cayman Islands.

Asia MotorWorks has also forayed into the light commercial vehicles (LCVs) segment with its first offering called Pug. The vehicle has a price tag of around Rs 3.5 lakh with a payload of around 1.5 tonne. The company is looking at both intercity buses and city buses.

The Asia MotorWork’s plant at Bhuj, Gujarat, is spread over 600 acres and has a capacity to produce 10,000 trucks per annum which the company plans to raise upto 50,000 units. The company is expanding capacity of this plant, and for this they require investment of Rs 1,500 crore. The company is a market leader in the 49 tonnes HCV niche segment.

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