Ashok Leyland sells entire holding in Czech arm for $10.96 mn

March 30, 2015 06:49 pm | Updated 06:49 pm IST - New Delhi

CHENNAI, 23/03/2013: Earth hour being observed in various parts of the world by switching off lights to raise voice against climate change. Vinyl hoarding displayed at the Ashok Leyland building near Little Mount, in Chennai on Saturday. Photo: R. Shivaji Rao

CHENNAI, 23/03/2013: Earth hour being observed in various parts of the world by switching off lights to raise voice against climate change. Vinyl hoarding displayed at the Ashok Leyland building near Little Mount, in Chennai on Saturday. Photo: R. Shivaji Rao

Hinduja Group flagship firm Ashok Leyland on Monday announced selling its entire holding in Czech arm Avia Ashok Leyland Motors to an undisclosed ‘strategic investor’ for a cash realisation of USD 10.96 million.

In a filing to the BSE, the company said it has divested its entire stake of 100 per cent ownership interest held in Avia Ashok Leyland Motors s.r.o. 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 s.r.o. 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 USD 10.96 million to the company,” it added.

In 2006, Ashok Leyland had acquired Avia Truck Business Unit, a leading vehicle manufacturer in Europe, at an estimated cost of around USD 35 million and helped it expand in global markets, and also improve product portfolio.

It was later rechristened as AVIA Ashok Leyland Motors and produced a class of trucks with gross vehicle weights of 6.5 to 12 tonnes.

Due to a slowdown in Indian commercial vehicles market in the past couple of years, Ashok Leyland had announced VRS in 2013 to cut costs.

However, it has recovered to some extent in the past year.

Its standalone net profit in the nine months ended December 31, 2014 stood at Rs 104.83 crore, while in the corresponding period a year ago, it had a net loss of Rs 334.01 crore.

Ashok Leyland shares closed 6.32 per cent up at Rs 74 per scrip on the BSE on Monday.

Meanwhile, in a separate filing later in the day, Ashok Leyland said it has divested 48.5 per cent equity stake held in Ashok Leyland Wind Energy Ltd (ALWEL) to an undisclosed buyer, making a “profit of Rs 6 crore”.

The company said, “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 Rs 6 crore in above transactions.”

0 / 0
Sign in to unlock member-only benefits!
  • Access 10 free stories every month
  • Save stories to read later
  • Access to comment on every story
  • Sign-up/manage your newsletter subscriptions with a single click
  • Get notified by email for early access to discounts & offers on our products
Sign in

Comments

Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.

We have migrated to a new commenting platform. If you are already a registered user of The Hindu and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.