Volvo selling remaining 3.7% stake in Eicher Motors for $278 mn: report

Will offer about 1 million shares in a price range of Rs 17,190-18,190 in an open market sale

Swedish truck maker Volvo AB is selling its remaining 3.7% stake in auto firm Eicher Motors, in a deal that could be valued at around $278 million, according to a term sheet seen by IFR.

Volvo is offering about 1 million shares in a price range of Rs 17,190-18,190 in an open market sale. Eicher shares closed at 18,191.15 on Wednesday.

In March, Volvo had sold 1.27 million Eicher shares for around 2.5 billion Swedish crowns ($296.05 million).

Volvo bought the Eicher stake in 2008 as part of a deal under which the Swedish company also set up a separate truck and bus making joint venture with Eicher in India.

"Eicher Motors wishes not to comment on any speculative news stories on Volvo," the company said in a statement. It added that all investments and business plans at the two companies' commercial vehicle joint venture continue as planned.

A Volvo spokeswoman declined to comment.

Volvo is under pressure to demonstrate the benefits of years of cost cuts and has, in addition to major staff cuts, also sold off non-core assets in recent years, including its aerospace division in 2012.