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Ashok Leyland gains on plan to raise stake in British bus maker

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The announcement was made after market hours on Tuesday, 20 December 2011.

Meanwhile, the BSE Sensex was up 206.95 points, or 1.36%, to 15,382.03.

On BSE, 1.99 lakh shares were traded in the counter as against an average daily volume of 6.95 lakh shares in the past one quarter.

The stock hit a high of Rs 23.20 and a low of Rs 21.70 so far during the day. The stock had hit a 52-week low of Rs 20.75 on Tuesday, 20 December 2011. The stock had hit a 52-week high of Rs 34.35 on 5 January 2011.

The stock had underperformed the market over the past one month until 20 December 2011, sliding 13.92% compared with the Sensex's 7.31% decline. The scrip had also underperformed the market in past one quarter, falling 17.05% as against 11.25% fall in the Sensex.

The mid-cap commercial vehicles maker has an equity capital of Rs 266.07 crore. Face value per share is Re 1.

The Hinduja Group company had acquired a 26% stake in Optare in July 2010. The proposed hike follows a refinancing agreement announced on Tuesday (20 December 2011) which, subject to Optare shareholders' approval, will enable synergy with Ashok Leyland's global plans for buses.

The re-financing has been achieved by Ashok Leyland facilitating a credit-line to support Optare's re-banking options and providing a substantially improved working capital facility for the business. Simultaneously, Ashok Leyland will reach 75.1% shareholding through placement of shares raising new equity.

Optare is Britain's leading maker of advanced low-floor integral buses and employs around 500 people across the group, principally at its new assembly facility in Sherburn in Elmet, Yorkshire. The company produces a wide range of fuel efficient buses of its own integral design. In addition Optare has pioneered its 'EcoDrive' programme across all of its products which deliver a wide range of low carbon power options, including hybrid, full electric and dual fuel models.

Ashok Leyland's net profit fell 7.8% to Rs 154.08 crore on 14% increase in net sales to Rs 3094.57 crore in Q2 September 2011 over Q2 September 2010.

Ashok Leyland is the flagship of the Hinduja Group and a leading manufacturer of commercial vehicles in India. With seven manufacturing locations at Chennai, Hosur (three plants), Alwar, Bhandara and Pantnagar (Uttarakhand), the company has a production capacity of 150,000 vehicles. Ashok Leyland has associate companies in the Czech Republic, the UAE and a joint venture in Sri Lanka, besides exports to over 20 countries worldwide.

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