Infrastructure and finance company IL&FS has exited from its joint venture ORIX Auto Infrastructure Services Ltd (OAISL) by selling 50 per cent stake to its partner ORIX Corporation of Japan for an undisclosed amount, the company has said in a statement on Wednesday.
OAISL commenced operations in FY1996 and offers a full range of auto infrastructure services, such as vehicle leasing & value-added services, car rentals, radio taxi, business transport solutions, commercial vehicle financing, equipment banking, service centres and logistics. It has assets around Rs 850 crore across its various verticals.
Under the deal, the IL&FS Group has entered into a share purchase agreement with ORIX Corporation and pursuant to the foregoing, its Japanese partner will acquire the shareholding of IL&FS and its affiliates in OAISL. Consequently, ORIX Corporation will own 99.95 per cent of the paid-up equity share capital of OAISL.
The acquisition by ORIX Corporation will add significant value to OAISL and its 100 per cent subsidiary – OAIS Auto Financial Services Ltd (an NBFC engaged in leasing and commercial vehicle financing) – in terms of growing a diversified product portfolio with technical support from and global linkages with ORIX’s businesses worldwide.
Incidentally, various media reports had earlier suggested that IL&FS might sell its entire stake in ORIX Auto Infra to the leading car rental company Hertz. In March this year, ORIX was reportedly in talks with Reliance Industries to sell its 23.87 per cent stake in IL&FS but the deal did not materialise.
It may be noted that vehicle financing & allied products is a core activity of Tokyo-headquartered ORIX Corporation. Listed on the Tokyo and New York stock exchanges, the group is a diversified financial conglomerate, with assets over $80 billion and operations across 23 countries. ORIX provides innovative value-added products and services to both corporate and retail customers, and its activities include leasing, corporate finance, real estate-related finance and development, life insurance and investment & retail banking.