By IANS,
New Delhi : India’s largest commercial vehicle manufacturer Tata Motors Tuesday signed an agreement to sell its 20 percent stake in Telco Construction Equipment Company Ltd (Telcon) to Japanese partner Hitachi for Rs.1,159 crore.
“Tata Motors, Hitachi Construction Machinery and Telcon, a 60:40 joint venture company between Tata Motors and Hitachi, signed an agreement under which Tata Motors has sold a further 20 percent stake in Telcon in favour of Hitachi for a consideration of Rs.1,159 crore,” the Indian auto company said in a statement.
With this, Hitachi becomes the majority stakeholder in Telcon.
For the transaction, Standard Chartered Bank is the financial advisor and AZB Partners is legal advisor, the statement added.
Telcon, a leading provider of mining, infrastructure, construction and agricultural equipment and services, was set up in 1999 as a wholly-owned subsidiary of Tata Motors on the spin-off of the construction equipment business unit of the auto major.
Subsequently, in 2000 and 2005, Tata Motors inducted Hitachi into Telcon by divesting 20 percent each of its shareholding. It enabled Telcon to have access to newer technologies and processes.
Telcon has manufacturing facilities at Jamshedpur, Dharwad and Kharagpur, and it exports to countries in Asia and Africa.