CHENNAI: The Hinduja Group has bought out the indirect holding of IVECO of Italy in Ashok Leyland.

IVECO held 15 per cent stake in Ashok Leyland through Land Rover Leyland International Holdings (LRLIH) Ltd, U.K., its joint venture with the Hinduja Group.

The Hinduja Group, on Monday, announced that it had acquired IVECO's 30 per cent holding in LRLIH. As a consequence, the Hinduja Group has now become the sole owner of LRLIH, says a release from the Group. The release, however, does not mention the sale consideration.

LRLIH has about 51 per cent holding in Ashok Leyland Ltd. and 59 per cent in Ennore Foundries Ltd.

In a telephone conversation with The Hindu, G. P. Hinduja, Vice-Chairman of the Hinduja Group, said the group saw "bright future for the commercial vehicle sector in India" and that it was committed to "ensure what best is needed for Ashok Leyland to meet the objective of its aggressive growth plans — both organic and inorganic." The IVECO buy-out, he felt, would give Ashok Leyland the freedom to move with new alliances and partnerships wherever required.

Future alliances

To a question on future alliances, he said, "a lot of opportunities are in the tray." He went on to add, "we are looking at the best that would bring maximum benefit to the company." Mr. Hinduja said that India was now emerging as a low cost production base. Ashok Leyland was a potential candidate for those looking for alliances in India, he added.

The nearly two-decade-old partnership between the Hinduja Group and IVECO could be traced to their acquisition of LRLIH from the Rover Group (U.K.) in 1987. The shareholding of LRLIH in Ashok Leyland was 40 per cent then, which was subsequently increased to 51 per cent in 1994.

A joint statement by Mr. Hinduja and Mr. Paolo Monferino, Chief Executive Officer, IVECO, said: "The Hinduja Group and IVECO are proud of the rapid strides made by Ashok Leyland in product and process technologies over the last two decades. In view of the changed business plans of both the partners and considering the strategic priorities for Ashok Leyland in the emerging global scenario, we have mutually agreed to pursue our goals independently, in the spirit of mutual respect and goodwill adopted during our long partnership".

He asserted that, "We will wholeheartedly support Ashok Leyland's efforts to further strengthen R&D efforts towards technological excellence and global competitiveness. This will be achieved through a combination of in-house development efforts and mergers and acquisitions. The recent acquisition of the AVIA truck business in Prague was a step in that direction and some more are on the anvil.''

Ennore Foundries' plans

He also referred to the aggressive expansion plans of Ennore Foundries Ltd, which included a greenfield project of 50,000-tonne capacity, built to global standards. This would take the company's total capacity to 1.46 lakh tonnes a year. The group was also pursuing acquisition opportunities in the foundry business globally, he added.

Dheeraj Hinduja, Vice-Chairman, Ashok Leyland, said Ashok Leyland's global ambitions went beyond vehicle manufacturing and marketing. "The company has the expertise and talent pool to have a significant global presence in the components business and in engineering design services, which should add up to significant revenue for the company in the coming years", he said.

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