Volvo sells 4.7% in Eicher for Rs 1,875 crore

Swedish truck maker AB Volvo has sold approximately 4.7 per cent stake in Eicher Motors (EML) for nearly 2.5 billion Swedish krona ($301.59 million) or about Rs 1,875 crore. Deccan Herald had reported about the stake sale in its March 4 edition.

As part of the joint venture agreement with Eicher for the commercial vehicle industry,
AB Volvo had also acquired 22.75 lakh shares of Eicher Motors, representing 8.4 per cent of the company’s equity capital. AB Volvo has divested 12.7 lakh shares of this on Wednesday, representing approximately 4.7 per cent of EML’s equity capital, Eicher Motors said.

This divestment will have no bearing whatsoever on VE Commercial Vehicles (VECV), the commercial vehicle joint venture of the companies, which will continue to be governed as an equal partnership venture.

The shareholding pattern and governance framework of VECV remains unchanged, EML said.

The sale will generate a capital gain of approximately 2.4 billion Swedish krona, which will impact operating income in the trucks segment in the first quarter of 2015, Volvo said in a statement.