As part of its efforts to slash debt, Ashok Leyland (ALL) on Friday said it has decided to dispose of some of its non-core assets, including two global assets — Albonair GmbH of Germany and Avia Ashok Leyland Motors of the Czech Republic. A merchant banker has been appointed to hunt for buyers.
“We have identified some non-core and major assets, including two global assets, for disposal to cut our debts further from the current level of R4,323 crore. In Q1, debt stood at R4,700 crore. A year ago it was more than R6,500 crore. Our objective is to achieve a 1:1 debt level,” said Gopal Mahadevan, chief financial officer, Ashok Leyland. The company will look at each business separately to see whether it can be restructured or is worth disposing of.
“We will take a call as and when required. This would further help shore up our working capital requirements as well as cut debt,” Mahadevan pointed out.
While Albonair GmbH manufactures complete solutions for Selective Catalytic Reduction (SCR) and Urea Dosing System (UDS), conforming to Euro 4, 5 and 6 emission standards for commercial as well as passenger vehicles, Avia Ashok Leyland manufactures trucks (5-12 tonne) for European markets. Albonair’s Germany plant is operational, but Avia has been defunct for a few months. Both had reported sizeable losses last fiscal.