Bharat Forge divests majority stake in Chinese joint venture

KOLKATA: Pune-based Bharat Forge Ltd, one of the country’s leading forging companies, has informed BSE that the company’s indirect subsidiary in Hong Kong -- Bharat Forge Hongkong Limited has divested its 51.85% stake in FAW Bharat Forge (Changchun) Company Limited to its joint venture partner, China FAW Corporation Limited.

The deal involved a consideration of $28.208 million or roughly around Rs 175 crore. With this Bharat Forge has exited from its eight year old joint venture in China.

In statement issued on Monday, Bharat Forge Limited said since the inception of the joint venture in 2006, it had invested nearly Rs 178 crore in the joint venture company over the eight year period, adding that the investment was carried out in four tranches. Bharat Forge said although the deal was concluded today, the divestment would be effective from October 31, 2013. The company added that the deal will have a positive impact on its cash flows and profitability.