Mahindra and Mahindra on Friday said it will exit from its Chinese tractor joint venture, Mahindra Yueda Yancheng Tractor Company, selling entire stake to several entities for RMB 82 million (Rs80 crore), as it plans to operate independently in China.
The Mahindra Group holds a 51-per cent stake in the Chinese JV through its wholly owned subsidiary Mahindra Overseas Investment Company (Mauritius) Ltd (MOICML). It has ''agreed to sell its entire shareholding of 51 per cent in Mahindra Yueda Yancheng Tractor Company Ltd (MYYTCL), China'', the company said.
''Upon receipt of requisite regulatory approvals and completion of other formalities, MYYTCL will cease to be a subsidiary of MOICML,'' it added in a regulatory filing.
The company is selling its stake to Jiangsu Yueda Investment Company (2 per cent), Jiangsu Yueda Group (39 per cent) and Yan Bingde (10 per cent) for an aggregate amount of RMB 82 million.
The equity transfer for the deal has been executed today and the deal is expected to be closed by the end of this month.
''This development would also mark the beginning of a new journey for Mahindra in China, as the company reviews its plans to explore the wider opportunities which would be available to Mahindra with its recent global initiatives in the farm machinery space,'' Mahindra and Mahindra said in a statement.
Mahindra said that through recent acquisitions it has expanded farm machinery product portfolio beyond tractors to rice transplanters, harvesters, etc.
''The company will evaluate the market opportunity for introducing these products into China and explore opportunities to create a global supply chain,'' it said.
Turnover of MYYTCL for the year ended December 2016 stood at RMB 339.89 million and its net worth was RMB 88 million.