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Ashok Leyland has appointed an investment banker to find a potential buyer for two of its investment in overseas. Last year company sold non-core assets worth Rs 1,500 crore.
A senior company official said "the company has identified some of the assets/ investments and appointed investemnt banker. End of this fiscal we will complete two transacations definiately".
Sources said that the company is expected to dilute stakes in its German and Czech Republic subsidiaries, both are which are loss making now.
In earlier interactions, company's management has been saying that they will look at only those assets, sales of which will not affect company's capacity of capability.
The proposed move is in line with the company's decision to sell or dilute stake in some of the core assets to reduce the debt level. Last year the company brought down the debt by around Rs 1,400 crore by doing this exercise.
Debt level was down by 24% to Rs 4,689 crore, as of March 2014, from Rs 6,163.2 crore in August 2013.
Company managed to reduce the overheads cost by 14% to Rs 461 crore in 2013-14 from Rs 537.1 crore, during the same period a year ago. Manpower cost was reduced by 7% to Rs 999.7 crore from Rs 1075.5 crore and operating working capital was reduced by 69% to Rs 244 crore form Rs 786 crore.
The company mobilised around Rs 660 crore by selling non crore assets, including land and its stake in IndusInd Bank and in Defiance Testing.
The official also said Debt to Equity ratio was 2.2:1 and post the recent QIP it was improved to 1.2:1. Ashok Leyland raised around Rs 667 crore through QIP, which again was used to pay debt.
This was highest amount ever raised by Ashok Leyland through an equity issue.
The company has set a target to close the fiscal with a debt to equity ratio of 1:1. This will be achieved by way of better working capital management and generating cash by selling non-core assets, said the official.
