Ashok Leyland, the flagship vehicle manufacturer from the Hinduja Group, has announced the company, with its associates, would increase stake in British bus maker Optare Plc from the current 26 per cent to 75.1 per cent, subject to approval by the latter’s shareholders.
Today, the company had entered into a re-financing agreement with Optare related to this, it said. However, the financial details were not disclosed. “The re-financing has been achieved by Ashok Leyland facilitating a credit line to support Optare’s re-banking options and providing a substantially improved working capital facility for the business. Alongside, Ashok Leyland will reach 75.1 per cent of the company’s share capital through placing of shares raising new equity,” stated a company announcement.
Dheeraj G Hinduja, chairman of Ashok Leyland, said, “We are confident that, together, we can surge ahead, with Optare taking advantage of the large opportunities for growth and development we see, based on synergy and integration with Ashok Leyland’s bus business.”
“We see this as an important element in realising our vision of being among the top five bus manufacturers globally,” said Vinod Dasari, managing director, Leyland. By leveraging synergies of the two companies, the company could accelerate technology sharing, develop future-ready products and increase global footprint, he added.
Jim Sumner, CEO, Optare, said, “This is great news for Optare’s customers, employees and suppliers, and secures stability and the long-term future of the business. The re-banking represents a defining moment in the company’s three-year turnaround plan which commenced in June 2009.”
At the end of July 2010, Leyland reached an agreement with Optare to acquire 26 per cent stake and the deal was estimated at an investment of around $7.5 million. The acquisition was supposed to be part of a long-term strategic partnership. The move for further acquisition would fully integrate Optare into Ashok Leyland’s global strategy for buses, added the company.