Mitsubishi to pull out of Eicher Motors

The agreement came to an end in March 1994 after the successful transfer of technology over seven years ago. But MMC still supplies certain spares for the LCVs, Take said.

When asked whether MMC had identified any prospective buyer for its share, Take said the company would first approach Eicher Motors itself to buy out the stake.

However, with stock market conditions turning from bad to worse, this was not the right time to sell off the stake and MMC would wait till things started looking up, Take said.

"This is not the right time to sell our shareholding. We will wait till the marketconditions improve," he said.

When contacted, an Eicher group official said they were unaware of any such move by MMC and would consider acquiring the stake if the Japanese partner approached them with the buy-out proposal.

"As of now we do not know anything about Mitsubishi’s plans for the sell off. Let them approach us first, then we would consider the option," he said.

At the current market price, MMC’s 7.5 per cent stake (about 15 lakh shares) would be worth Rs 1.5 crore. Eicher Motors was quoted around Rs 10 at National Stock Exchange on Friday.

Apart from the equity participation in Eicher Motors, MMC currently has a technology supply agreement with two companies in the country– with Hindustan Motors (HM) for its `Lancer’ car project and with Mahindra and Mahindra for `Voyager’ project.

Under the agreement with HM, Mitsubishi is free to pick up ten per cent equity in the company. HM has already made it clear that they are ready to offload ten per cent in favour of MMC at any point oftime.

On this proposal, Take said Mitisubishi had no immediate plans to acquire the stake as the Japanese auto major was currently going through a lean period back home.