Swedish commercial vehicle major Volvo may sell shares worth USD 250-300 million in India’s Eicher Motors, according to investment banking sources.
Volvo is looking to sell some of its holding in the Indian firm for up to USD 250-300 million, they said.
According to data on the BSE, Volvo has 8.4 per cent stake in Eicher Motors as on quarter ended December 31, 2014. This stake is worth about Rs 3,600 crore (or USD 580 million) as per today’s closing price of Eicher on the BSE.
Details could not be ascertained as calls and query to Eicher Motors Ltd Managing Director and CEO Siddhartha Lal remained unanswered.
When contacted a company spokesperson also declined to comment. An emailed query to Volvo Group also remained unanswered.
A source, however, said there could be an announcement soon.
Reacting to reports of Volvo’s move, Eicher Motors shares slid 3.78 per cent on the BSE today.
The company’s shares ended the day at Rs 15,891.30 per scrip on the BSE. It had opened at Rs 16,392 per scrip and went to touch intra-day high of Rs 16,392 per share shortly, before losing ground and touching a low of Rs 15,682.35 per scrip.
In 2008, Volvo Group and Eicher Motors had joined hands to form a 50:50 joint venture—VE Commercial Vehicles Limited (VECV). Volvo had also made a separate investment in Eicher Motors Ltd for 8.1 per cent stake.
VECV began operations in July 2008 and its 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.