Finance, Other, Wind

Ashok Leyland to divest stake in wind energy business

According to reports, Ashok Leyland, the second-largest commercial vehicle manufacturer, plans to divest non-core businesses in a bid to reduce debt.

The company, which has total debt of Rs5,000 crore, including a Rs1,500 crore short-term loan, intends to sell stake in businesses like software and wind energy to pay off part of the debt.

“As per our preliminary judgement, divestment in non-core pockets should generate `500 crore and we plan to do it over the next one year,” K Sridharan, CFO, told analysts in an earnings call.

“We are working with investment bankers and consultants to identify strategic customers for these businesses.”

As part of the plan, the company is looking at selling part of its stake in German subsidiary Albonair GmbH, which provides solutions for reduction in automotive emissions. It also plans to divest Defiance Technologies and Defiance Testing, which provide services in design engineering, testing and validation.

Asked about a possible sale of stake in Indusind Bank, the company said it could be one of the options.

Over 2013-14 and 2014-15, it plans a capital expenditure (capex) of Rs550-600 crore. For the current fiscal, the overall capex is likely to be around Rs900 crore.

For the third quarter, the company posted an 11% growth in net profit to Rs74.14 crore, though net sales declined 19% to Rs2,322.50 crore, largely due to a slowdown in the commercial vehicle segment.


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