Ashok Leyland to buy 19% additional stake in HLFL for up to Rs 1,200 cr

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Published: March 19, 2020 2:20:21 AM

In November 2017, Ashok Leyland had bought out Everfin Holdings’ 4.68% stake in HLFL for a consideration of Rs 225 crore, sources in the know said.

ALL in a regulatory filing said that the agreements to acquire 19% equity shares in HLFL from the existing shareholders will be entered by the company in due course.ALL in a regulatory filing said that the agreements to acquire 19% equity shares in HLFL from the existing shareholders will be entered by the company in due course.

Commercial vehicle major Ashok Leyland (ALL) on Wednesday said that the board of directors of the company has given approval to acquire up to 19% additional equity shares in Hinduja Leyland Finance (HLFL), a subsidiary company, from the existing shareholders, in tranches, for a consideration not exceeding Rs 1,200 crore. This move forms part of ALL’s consolidation in the company.

Last month, ALL, along with other investors, had entered into a supplemental share purchase agreement with Everfin Holding to acquire 3,28,14,401 equity shares collectively (constituting 7% in the paid-up share capital of HLFL) at an agreed price of Rs 119 per share for a total consideration of Rs 390.94 crore. The agreement to acquire the equity shares of HLFL has been spread over a period of nine months in various tranches.

In November 2017, Ashok Leyland had bought out Everfin Holdings’ 4.68% stake in HLFL for a consideration of Rs 225 crore, sources in the know said. Everfin Holdings, an arm of Everstone Group, has been the investor of HLFL since 2013. For the fiscal year ended March 2019, HLFL had reported a profit of `275.64 crore on a revenue of Rs 2,560.64 crore.

Consequent to Everfin Holdings’ decision to sell part of its stake in HLFL, Ashok Leyland, with other investors, has decided to acquire the shares in five tranches. Of the 7% holding, 2.11% has already been acquired by other investors

Hinduja Leyland Finance was incorporated on November 12, 2008. It is one of India’s leading vehicle finance NBFCs with a focus on urban and semi-urban markets. Through a vast network of branches, it finances a wide range of commercial and personal vehicles, which include medium- and heavy-commercial vehicles (MHCVs), light commercial vehicles (LCVs), small commercial vehicles (SCVs), cars, multi-utility vehicles, three wheelers, and two wheelers, as well as various kinds of used vehicles. It also finance tractors and construction equipment, and provide loans against property (LAP).

ALL in a regulatory filing said that the agreements to acquire 19% equity shares in HLFL from the existing shareholders will be entered by the company in due course. “As and when the company completes acquiring shares in tranches and if the said acquisition exceeds 2% or more of the equity shares of HLFL, the company will inform the stock exchanges, as required,” ALL said.

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