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Journalism of Courage
Force Motors today said it has decided to ‘almost exit’ its joint venture with MAN Truck & Bus AG by selling 5.58 lakh shares for 150 million euro (over Rs 1,050 crore) to the German partner.
In 2006,Pune-based Force Motors and MAN Truck & Bus had formed a JV — MAN FORCE Trucks Pvt Ltd (MFTPL) — to produce heavy commercial vehicles.
“After lots of discussions,we came to a conclusion that we should almost exit the joint venture. At least,we have decided not to be involved in the management control of the JV,” Force Motors Chairman Abhay Firodia said.
Although he did mention how much stake the company has sold to its partner,Firodia said,”We have given very nearly the full control to them.”
During the formation of the JV,the Indian firm was the majority partner with 80 per cent stake,which later became a 50:50 partnership in 2008.
Earlier in a statement,the company said,”Subject to receipt of necessary approvals,Force Motors will sell and transfer 5,57,97,100 equity shares of MFTPL to MAN for a consideration of euro 15,00,00,000.”
It,however,said both the companies will continue to cooperate with each other regarding MFTPL that will be based on the new contractual arrangement being agreed.
In 2003,Force Motors had planned to manufacture heavy commercial vehicles for the Indian market by sourcing technology under licence agreement. It had procured engines,cabs and axles from MAN,while gearboxes were sourced from ZF.
Later,the domestic firm formed the joint venture company with MAN.
When asked if Force Motors will form any new joint venture with some other player to be present in the heavy commercial vehicle segment,Firodia said,”As of now we do not have any plans to form any new JV with anyone.”
