The Chennai-based company may raise a part of the required Rs 600 crore equity investments for the south Indian joint ventures by selling shares, K Sridharan, CFO, Ashok Leyland said at an analyst meet.
"We are looking to raise part or full amount for our equity participation in the Nissan joint venture. We will incentivise our shareholders by providing some kind of entitlement," he said. "We may list the venture later.''
Ashok Leyland and Nissan agreed to set up a joint venture in 2007 to build LCVs at an estimated investment of Rs 2,400 crore. The two companies will invest Rs 600 crore each as equity and arrange the remaining Rs 1,200 crore through debt.
Ashok Leyland is yet to decide on its fund-raising strategy, but is considering a preferential share issue, rights issue and convertible bonds. The company is also looking at having a holding company as it considers the three separate JV companies as one entity.
The company had formed three JV companies with Japan's third largest auto making company Nissan early this year. These companies will look at manufacturing vehicles and powertrain and technology development.
The first of the companies, Ashok Leyland Nissan Vehicles (ALNVPL) will be a light commercial vehicle manufacturing company, owned 51 per cent by ALL and remaining by Nissan. This company will produce 100,000 units in the first phase. It will make 8 LCV models in the range of 1.25-3 tonnes. These will be both passenger and goods carriers and will be rolled out by 2010-11.
Nissan Ashok Leyland Powertrain (NALPPL) will be the powertrain making company, where Nissan will hold 51 per cent and ALL will own the remaining 49 per cent.
The third company will be a technology development company called Nissan Ashok Leyland Technologies (NALTPL), which will be equally owned by ALL and Nissan.
Ashok Leyland is planning to invest Rs 3,000 crore over the next three years for product development and technology upgradation, mainly in the medium and heavy commercial vehicle businesses.
The company is looking to augment its capacity to 184,000 units by 2010 from the current 84,000 units, by utilising the amount of Rs 850 crore raised through external commercial borrowing (ECB) in January and funding the remaining requirements through internal accruals.
