The Hindu : TVS & Sons rejigs Lankan JV

Online edition of India's National Newspaper
Saturday, Apr 26, 2003

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Business

TVS & Sons rejigs Lankan JV

By Our Special Correspondent

CHENNAI APRIL 25. TVS & Sons Ltd. has restructured its over five-year-old Sri Lankan joint venture, TVS Lanka P. Ltd.

The revamp has seen the consolidation of non-TVS holding into a single entity. Consequently, the 60:40 joint venture between the TVS Group and a host of Sri Lankan outfits has turned into a 50:50 operation between TVS & Sons and United Motors Lanka Ltd. (UMLL), a listed company in the island nation selling the largest volume of Japanese brand of new vehicles.

TVS Lanka P. Ltd. was started in September 1997 with an initial equity investment of Rs. 4.20 crores. The re-jigged venture will now have an equity capital of Rs. 6 crores. The TVS group is awaiting the Reserve Bank of India's approval for this restructuring exercise.

United Motors Lanka Ltd., according to R. Dinesh, Director of the joint venture, bought out the holdings of Sunmatch Group and also brought in fresh investment in the form of equity.

Mr. Dinesh said the re-organisation of the joint venture was necessitated by changing times and environment in the island nation.

The tie-up with UMLL, he said, was done with the objective of beefing up the network to garner a major portion of the automotive market in the island. The idea was to ensure that investments and resources spent yielded fair volume of business and profit.A re-worked JV with a strong local alliance would in the near-term take up distribution of TVS Motor Company's two-wheelers, both mopeds and motorcycles, in Sri Lanka. The JV, he said, would also hawk tools and garage equipment, facilitating better servicing of cars and commercial vehicles. Mr. Dinesh hinted that over a period the JV would establish a multi-brand repair service network and even look at distributing Made in India cars and utility vehicles.

Addressing a press conference here today, he also announced the formation of joint venture between TVS Lanka P. Ltd. and World-wide General Trading Agency P. Ltd., a member of the Queens Group in Sri Lanka. Christened TVS Auto Parts P. Ltd., the new company will distribute four-wheeler vehicle parts across Sri Lanka. TVS Lanka will hold 65 per cent stake in the Rs. 2 crore (Sri Lankan unit) equity of the company. The balance will be held by World-wide. TVS Auto Parts, it was stated, would initially begin hawking parts for Japanese vehicles. This alone would fetch significant volume, he said. Parleys had also been initiated with the Indian auto component makers for making parts to meet the needs of this specific segment, he said.

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