Shareholders of British bus manufacturer Optare Plc have approved Ashok Leyland and its associate companies proposal of increasing their stake by 49.1 per cent to 75.1 per cent.
The approval came after Scottish bus and coach manufacturer Alexander Dennis Ltd late last month, backed out from launching a bid for Optare after Ashok Leyland, the flagship company of the London-based Hinduja Group, refused to sell its stake in the bus maker. (See: Alexander Dennis backs out of Optare bid as Ashok Leyland refuses to sell stake)
Ashok Leyland, which already held 26-per cent of Optare, had last month agreed to invest Rs30 crore by acquiring an additional 49.1 per cent by facilitating a credit-line to support Optare's re-banking options and providing a substantially improved working capital facility for the business.
Optare, whose share price has fallen more than 85 per cent over the past 12 months, has been hit by a lack of trade credit insurance for its exports, which has put pressure on its working capital requirements.
The company's board told shareholders, ''If the placings do not happen, Optare does not have any alternative to finance ongoing operations and thus will not be able to continue to trade''.
''More than 99.9 per cent of the shareholders who voted backed the deal under which Ashok Leyland will increase its stake to 75.1 per cent of Optare and simultaneously fully integrate Optare and its advanced product range into Ashok's Global Bus Strategy. Turnout was over 70 per cent,'' Optare's said in a statement.