Force Motors soars 20% on JV stake sale
Force Motors rose sharply after the autoparts maker said it would sell up to 14.5 per cent stake in its joint venture with Germany's MAN Nutzfahrzeuge for about Rs 300 crore, enabling the German auto firm to raise its stake in the JV to 50 per cen...
By ET Online |
MUMBAI: Force Motors rose sharply after the autoparts maker said it would sell up to 14.5 per cent stake in its joint venture with Germany's MAN Nutzfahrzeuge for about Rs 300 crore, enabling the German auto firm to raise its stake in the JV to 50 per cent.
A statement issued to the exchanges late Tuesday said the proposed change in the equity structure of the JV would take place in two steps. First, Force will sell 14.2% stake to MAN for Rs 300 crore. Later, MAN will infuse Euro 40 mn (around Rs 250 crore) in the JV through subscription of a rights issue. Force will refrain from subscribing to the issue. As a result, MAN's stake will go up to 50% from the current 30%.
The transaction, which is to be completed over the next few weeks, will peg the enterprise value of the JV at Rs 2,000 crore. Both the parties have signed the deal on Tuesday in Munich.
The JV, which was announced in 2005, is to manufacture HCVs in the 20-40 tonne range. It failed to meet its export commitments in the Russian and erstwhile CIS markets. It is located at Pithampur, near Indore, in Madhya Pradesh. In September, Force had raised 70% of the equity capital while the remaining 30% came from MAN.
At 10:30 am, Force Motors shares hit the upper circuit limit, up 20 percent at Rs 74.40.
A statement issued to the exchanges late Tuesday said the proposed change in the equity structure of the JV would take place in two steps. First, Force will sell 14.2% stake to MAN for Rs 300 crore. Later, MAN will infuse Euro 40 mn (around Rs 250 crore) in the JV through subscription of a rights issue. Force will refrain from subscribing to the issue. As a result, MAN's stake will go up to 50% from the current 30%.
The transaction, which is to be completed over the next few weeks, will peg the enterprise value of the JV at Rs 2,000 crore. Both the parties have signed the deal on Tuesday in Munich.
The JV, which was announced in 2005, is to manufacture HCVs in the 20-40 tonne range. It failed to meet its export commitments in the Russian and erstwhile CIS markets. It is located at Pithampur, near Indore, in Madhya Pradesh. In September, Force had raised 70% of the equity capital while the remaining 30% came from MAN.
At 10:30 am, Force Motors shares hit the upper circuit limit, up 20 percent at Rs 74.40.
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