30 March, 2010
Tata Motors, Hitachi Construction Machinery Co. Ltd. (Hitachi) and Telco Construction Equipment Company Limited (Telcon), a 60:40 joint venture company between Tata Motors and Hitachi, today signed an agreement under which Tata Motors has sold a further 20% stake in Telcon in favour of Hitachi for a consideration of Rs.1159 crores. Consequently Telcon will be owned 60% by Hitachi and 40% by Tata Motors.
Standard Chartered Bank and AZB Partners have been Financial and Legal Advisors respectively for the Company to this transaction.
Telcon, India’s leading provider of mining, infrastructure, construction and agricultural equipment and services, was set up in 1999 as a wholly owned subsidiary of Tata Motors on the spin-off of the Construction Equipment Business Unit of Tata Motors. Subsequently, in 2000 and 2005, Tata Motors inducted Hitachi into Telcon by divesting 20% each of its shareholding thereby enabling Telcon to have access to newer technologies and processes. Telcon has manufacturing facilities at Jamshedpur, Dharwad and Kharagpur, over 200 sales, service and customer support offices and an extensive dealership network across India. Its exports operation includes countries in Asia and Africa. The company has two subsidiaries, Serviplem S.A and Comoplesa Lebrero S.A, in Spain. In the FY 2008-09, Telcon reported a gross turnover of Rs.2130 crores and a PAT of Rs.85 crores.
Hitachi Construction Machinery Co. Ltd was established in 1970, when Hitachi Ltd. spun off its construction machinery division. It has established itself as a leader in the area of construction machinery, using extensive experience and advanced technological capabilities to develop and manufacture a wide range of leading-edge products. Hitachi’s main product-line comprises a range of hydraulic excavators from mini excavators upto 800-ton ultra-large excavators. Hitachi has manufacturing facilities in Europe, the U.S. and Asia and markets wheel loaders, off-road dump trucks and other products made by Hitachi group companies or in partnership with major manufactures. Hitachi recorded consolidated net sales of around US$ 7.6 billion in fiscal 2008 -09 (http://www.hitachi-c-m.com/).
About Tata Motors:
Tata Motors is India’s largest automobile company, with consolidated revenues of Rs.70,938.85 crores ($ 14 billion) in 2008-09. Through subsidiaries and associate companies, Tata Motors has operations in the UK, South Korea, Thailand and Spain. Among them is Jaguar Land Rover, the business comprising the two iconic British brands. It also has an industrial joint venture with Fiat in India. With over 4 million Tata vehicles plying in India, Tata Motors is the country’s market leader in commercial vehicles and among the top three in passenger vehicles. It is also the world’s fourth largest truck manufacturer and the second largest bus manufacturer. Tata cars, buses and trucks are being marketed in several countries in Europe, Africa, the Middle East, South Asia, South East Asia and South America. (www.tatamotors.com)