Ashok Leyland sells 32% in engineering services arm Hinduja Tech to Nissan
25 November 2014
Hinduja Group flagship company Ashok Leyland has sold a 32-per cent stake in its subsidiary Hinduja Tech Ltd (HTL) to Japanese automaker Nissan in a strategic divestment.
The company did not disclose the value of the stock sale, but said the sale helped unlock the unit's value.
"To unlock value, HTL has roped in a strategic investor to subscribe to the equity share capital of the company. Consequent to the allotment of equity shares to the strategic investor, the holding of Ashok Leyland now stands at 68 per cent," Ashok Leyland Ltd said in a filing with the Bombay Stock Exchange (BSE).
HTL, formerly Defiance Technologies Ltd, a wholly-owned unlisted unit set up by Ashok Leyland, has now become a subsidiary of the company, the filing said.
Hinduja Tech was incorporated in 2009 with a focus to provide engineering, manufacturing and enterprise (EME) services and solutions for automotive, aerospace, defence, industrial and general manufacturing industries.
Ashok Leyland has been looking to divest its non-core assets to cut its debt.
In its stock exchange filing, Ashok Leyland Ltd, the second largest commercial vehicle maker in the country, said it sold the 32 per cent equity holding in Hinduja Tech Ltd through fresh issue of securities.
Subu D Subramanian, MD and CEO of Hinduja Tech, separately said Nissan International Holdings, a Dutch investment arm of Japanese automaker Nissan, is the strategic investor.
Hinduja Tech provides engineering, manufacturing and enterprise (EME) services and solutions for automotive, aerospace, defence, industrial and general manufacturing industries.
Ashok Leyland has been looking to divest its non-core assets to cut its debt. In August, Ashok Leyland raised Rs210 crore (around $35 million) by selling the residual section of one of its residential properties at Chennai. In July, the commercial vehicle maker also raised over $100 million through a QIP.
Chennai-based Ashok Leyland, which manufactures and sells commercial vehicles, has Kuwait's sovereign wealth fund as one of its institutional shareholders.