Hindujas may buy majority stake in UK's Optare

Conglomerate Hindujas is likely to take a majority stake in ailing British bus maker Optare, a media report said.

"...It emerged that the AIM-listed British bus maker is to fall under the control of the billionaire Hinduja brothers," The Times reported today.

A potential counter-bid for Optare from Alexander Dennis evaporated yesterday after the latter's backers, led by Sir Brian Souter, dropped out, the daily pointed out.

Optare is a specialist maker of easy access single deck buses and has been in a financial trouble for some months as "plunging sales and deepening losses took their toll", the daily said.

According to the report, the company is facing a potential bankruptcy with the termination of its banking arrangements.

 

"However, just before Christmas, Ashok Leyland, the Indian bus maker and jewel in the crown of the Hindujas' intercontinental trading empire, rode to the rescue.

"The Indian said that they would offer Optare 12 million pounds of credit for working capital. In return, Optare would treble its number of shares in issue in a placing that the Hindujas would sweep up at a fraction of a penny a share...," the report said.

The daily noted that Hindujas would thereby increase their existing 26% stake to 75% for only four million pounds.

As per the report, on Wednesday, the counter-bid appeared to be gaining momentum when Optare Chairman John Fickling agreed to let Alexander Dennis in for due diligence.

"However, within hours, the bid had stalled after an unequivocal hands off response from Madras, in which the Hindujas said that they would not countenance any arrangement with the Scottish interlopers and that they would not sell their stake at any price," the report said.