Ashok Leyland sells entire stake in Avia for $10.96 million
The move is a part of restructuring of investment in subsidiaries
Chennai: Ashok Leyland Ltd, the second largest Indian truck and bus maker, on Monday said that it had sold its entire stake in its unit Avia Ashok Leyland Motors for $10.96 million to a strategic investor.
The Chennai-based vehicle maker on Monday told the stock exchange that the move was part of restructuring of investments in its units. The firm also sold its entire 48.5% stake in Ashok Leyland Wind Energy Ltd to a buyer whose name was not disclosed; the sale earned it ₹ 6 crore in profit.
Ashok Leyland shares rose 6.32% to ₹ 74 on BSE, while the exchange’s benchmark Sensex gained 1.88% to 27,975.86 points.
Ashok Leyland bought Czech-based Avia for $35 million; the sale at $10.96 million could mean a one-time loss that could impact its quarterly financial results, said Tushar Pendharkar, an analyst at Right Horizons Financial Services.
Ashok Leyland had total debt of ₹ 3,700 crore and cash and current investments were at ₹ 424 crore as on 30 September 2014. So, the sale proceeds of $10.96 million (about ₹ 68.5 crore) from Avia and another ₹ 6 crore from the stake sale in its wind energy firm will not help it cut debt much, said Pendharkar.
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