Volvo selling up to $300m worth of Eicher Motors shares
MUMBAI/STOCKHOLM (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 14,636 and 15,907 rupees per share, according to the document. A Volvo spokeswoman in Stockholm declined to comment.
Volvo owns 8.4 percent of Eicher Motors, according to data from exchange BSE Ltd. 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 percent 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 percent at 15,907.95 rupees ahead of the sale. Volvo shares were down 0.7 percent in Stockholm at 1156 GMT.