Swedish commercial vehicle major AB Volvo on Wednesday sold around 4.7 per cent stake in Eicher Motors Ltd. (EML) for $310 million or over Rs. 1,920 crore.
“AB Volvo has today divested 12.7 lakh shares, representing approximately 4.7 per cent of Eicher Motors Limited’s equity capital,” a EML spokesperson said in a statement.
In May 2008, AB Volvo and EML had entered into a joint venture agreement to create VECV with the intent to drive modernisation in the commercial vehicle industry.
As a part of the transaction, in addition to acquiring 45.6 per cent of the shareholding of VECV, AB Volvo had also acquired 22.75 lakh shares of EML representing 8.4 per cent of equity capital of the company.
“This divestment will have no bearing whatsoever on VE Commercial Vehicles Limited (VECV), which will continue to be governed as an equal partnership venture,” the statement said.
The shareholding pattern and governance framework of VECV remains unchanged, it added.
“Both the joint venture partners are committed to nurture this further in the exciting period that lies ahead, as the commercial vehicle industry looks to revive after a long period of downturn,” it said.
VECV’s business includes the complete range of Eicher trucks and buses, VE Powertrain, Eicher’s components and engineering design services businesses as well as the sales and distribution business of Volvo trucks within India.
Eicher shares were trading at Rs 16,100 apiece, up 1.31 per cent, on the BSE.
