Force Motors today said it will sell 14 per cent stake in its joint venture with German auto maker Man Nutzfahrzeuge for Rs 300 crore, triggering as much as 20 per cent surge in its shares.
The domestic auto components maker would be, in total, offloading 20 per cent stake in the joint venture, Man Force Trucks, with the remaining shareholding to be sold through a rights issue.
In a filing to the Bombay Stock Exchange, Force Motors said it would raise up to euro 40 million (about Rs 250 crore) through the rights issue.
Force Motors and the German firm had started the joint venture in 2006 to manufacture heavy commercial vehicles.
Following the move to offload 20 per cent stake, both Force Motors and Man Nutzfahrzeuge would become 50:50 partners in the joint venture. At present, the former had a 70 per cent stake in it.
"Subject to necessary approval, the share ownership of the JV company shall be revised so as to have a proportion of 50 per cent each between Force Motors and Man," the filing said.
The chairman of the joint venture would be from Force Motors, while the vice-chairman would be nominated by the German company.
"Man is happy to increase its shareholding percentage and equally its participation in the management. This reaffirm our commitment to India and to this JV," Man Nutzfahrzeuge AG Chairman Anton Weinmann said.
The scrip of Force Motors shot up 20 per cent to hit its upper circuit at Rs 74.40 on the BSE.
