Ashok Leyland divests entire stake in Czech arm for $10.96 mn
30 Mar 2015
Hinduja Group flagship Ashok Leyland has sold its entire stake in Czech arm Avia Ashok Leyland Motors, to move out of non-core business, as part of the company's restructuring plan.
Ashok Leyland also placed another foreign subsidiary, Albonair GmbH, on the block, as part of restructuring of investment in subsidiaries.
The Chennai-based commercial vehicle major said it sold the stake to an undisclosed 'strategic investor' for a $10.96 million in cash.
In a filing with the Bombay Stock Exchange (BSE), the company said it has divested its entire stake of 100 per cent ownership interest held in Avia Ashok Leyland Motors sro to a strategic investor, as part of restructuring of investment in subsidiaries.
''The relevant agreements to this effect have been signed and closing of the deal has been completed,'' it said.
Consequently, Avia Ashok Leyland Motors sro has ceased to be a wholly-owned subsidiary of the company with immediate effect, the filing said.
''The above transaction has resulted in cash realisation of $10.96 million to the company,'' it added.
Ashok Leyland had, in 2006, acquired Avia Truck Business Unit, a leading vehicle manufacturer in Europe, at an estimated cost of around $35 million and helped it expand in global markets, and also improve product portfolio.
It was later rechristened AVIA Ashok Leyland Motors and produced a class of trucks with gross vehicle weights of 6.5 to 12 tonnes.
A slowdown in the domestic commercial vehicles market over the past couple of years had forced Ashok Leyland to announce a VRS in 2013 to cut costs.
The market has since recovered to some extent. Its standalone net profit in the nine months ended 31 December 2014 stood at Rs104.83 crore against a net loss of Rs334.01 crore in the corresponding period last year.
In a separate filing, Ashok Leyland also said it has divested 48.5 per cent equity stake in Ashok Leyland Wind Energy Ltd (ALWEL) to an undisclosed buyer, making a ''profit of Rs6 crore''.
''All the relevant agreements to this effect have been signed and closing of the deal has been completed.
''Consequently, the shareholding of the company in ALWEL has come down from 60 per cent to 11.5 per cent and hence ALWEL ceases to be a subsidiary of the company with immediate effect,'' Ashok Leyland said.
As part of the transaction, the company said it has also sold its windmill assets on slump sale basis, adding that it ''made a profit of Rs6 crore in above transactions.''