Ashok Leyland buys 49% more in Optare

Hinduja flagship company Ashok Leyland today said it had acquired an additional 49.1% stake in British bus maker Optare Plc for over Rs 30 crore, taking its total holding to 75.1%.

"Ashok Leyland together with its associate companies will increase its stake in the British bus maker Optare Plc to 75.1%, thanks to a re-financing agreement announced today," the company said in a statement.

The company had initially acquired 26% stake in Optare in July 2010 as a long-term strategic partnership, it said, adding that the move integrates Optare into Ashok Leyland's global strategy for buses.

"The board of directors of the company at their meeting held today approved the proposal for making additional investment up to GBP 40,04,495 in Optare Plc, UK," Ashok Leyland said.

Ashok Leyland's share will reach 75.1% of the company's share capital through placing of shares, raising new equity, it added.

"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," it said.

Commenting on the development, Ashok Leyland Chairman Dheeraj G Hinduja said: "We are confident that, together, we can surge ahead with Optare, taking advantage of the large opportunities for growth and development we see based on synergy and integration with Ashok Leyland's bus business."

The company considers this move as an important element in realising its vision of being among the top five bus makers globally, the statement said.

"This is great news for Optare's customers, employees and suppliers and secures stability and the long-term future of the business. The re-banking represents a defining moment in the company's 3-year turnaround plan which commenced in June 2009," Optare Chief Executive Officer Jim Sumner said.