Force Motors zooms 20% on plans to reduce stake in German JV

Force Motors has zoomed to the 20% upper circuit at Rs 605 after the company decided to reduce stake in the Indo-German joint venture Man Force Trucks (MFTPL).

The company has plans to sell and transfer 55,797,100 equity shares to German partner for Rs 1,050 crore. The company would give full control of the JV to the German truck making firm through the proposed share sale, which will raise Rs 1,050 crore (euro 150 million) for Force Motors.

Force Motors has been gradually reducing its stake in the joint venture since its formation in 2006. It held 70 per cent equity, while the balance was held by MAN, when the company was formed. The sales, marketing and distribution network will remain the same. Decisions on future product launches will solely rest with the German company as the JV becomes its subsidiary.

The stock remains locked at the upper circuit, with trades of around 4,300-odd shares on the BSE. The counter has pending buy orders for nearly 17,000 shares.