Volvo selling up to $300 mn worth of Eicher shares

Abhishek Vishnoi and Johannes Hellstrom    Mumbai/Stockholm     Last Updated: March 3, 2015  | 19:13 IST
Volvo selling up to $300 mn worth of Eicher shares
Photo: Reuters

Truck maker Volvo is looking to sell $250 million worth of shares in Eicher Motors , with an option to increase the sale to up to $300 million, according to a term sheet seen by Reuters on Tuesday.

The share sale is happening at an indicative range of between Rs 14,636 and Rs 15,907 per share, according to the document.

A Volvo spokesperson in Stockholm declined to comment.

Volvo owns 8.4 per cent of Eicher Motors, according to data from BSE. The marketing term sheet seen by Reuters did not specify how many shares were being sold.

Volvo and Eicher also own a 50-50 truck and bus making joint venture called VE Commercial Vehicles, but Volvo's stake may fall to 46 per cent after the sale of Eicher shares, according to India auto analysts.

Volvo is under pressure to demonstrate the benefits of years of cost cuts aimed at boosting its profit margin by 3 percentage points by the end of 2015.

In addition to major staff cuts, Volvo has also made big divestments in recent years. It sold its aerospace division in 2012 and is conducting a review of its IT business with thousands of staff, to determine what is essential to its operation.

Eicher shares closed down 3.2 per cent at Rs 15,907.95 ahead of the sale. Volvo shares were down 0.7 per cent in Stockholm at 1156 GMT.

(Reuters)

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