Gurgaon-based automobile components firm Rico Auto Industries Ltd has received its board’s nod to sell its entire 50 per cent stake in Continental Rico Hydraulic Brakes India Pvt Ltd to its German JV partner Continental AG, the company has said in a statement to the Bombay Stock Exchange. However, it did not disclose the deal amount.
After the stake sale to Continental Automotive Holding Netherlands BV, another Continental Group company, the JV will be totally owned the group.
Shares of Rico Auto were trading at Rs 12.84 a unit on the BSE, up 18.89 per cent from the previous close on the backdrop of the stake sale.
Rico and Continental had formed the equal equity JV in 2007 to build a hydraulic brake systems plant in India in a two-step approach. Rico Hydraulic Brakes produces calipers for front and rear axles, drum brakes, master cylinders, brake boosters and load sensing proportioning valves for vehicles of all classes.
Rico Auto is backed by Ashish Dhawan, a senior managing director of ChrysCapital Investment Advisors. Dhawan held 5.38 per cent stake in Rico Auto in his personal capacity, as on Dec 30, 2011.
Rico Auto and its subsidiaries supply high-precision, fully machined aluminum and ferrous components and assemblies to automotive OEMs (original equipment manufacturers) in India. The company caters to two-wheeler, passenger car and commercial vehicle segments, and also to system suppliers.
In December 2011, Rico Auto sold its entire stake in its joint venture and subsidiary KRP Auto Industries Ltd to Kailash Royal Premium Projects Pvt Ltd for Rs 20.3 crore.
In another recent deal in the auto component sector, PE firm Phi Advisors Pvt Ltd acquired around 4.7 per cent stake in automotive products maker Pricol for Rs 8.1 crore ($1.6 million) last November.