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Neha Kaushik

New Delhi , June 8

LIGHT commercial vehicles manufacturer Swaraj Mazda Ltd (SML) seems all set to induct a new technical partner in order to expand its range of commercial vehicles.

Industry sources pointed out that the technical partner is most likely to be Japanese automobile major Isuzu and that it is unlikely that Isuzu would pick up stake in Swaraj Mazda.

Incidentally, SML's technical assistance agreement with Mazda has already expired and Mazda too has withdrawn from the manufacture of commercial vehicles.

The sources added that the technical partner would be brought in by Sumitomo, which already has a 10.4 per cent stake in SML and is keen to pick up Punjab Tractors' 15 per cent equity in the company .

"Sumitomo has already taken initiatives with a leading Japanese commercial vehicle manufacturer Isuzu for providing fresh technical assistance and new commercial vehicles range to SML," sources said.

Sumitomo had approached the Board of Directors of Punjab Tractors Ltd (PTL) with a request to sell to Sumitomo roughly half of PTL's 29.04-per cent equity holding in SML on the ground that their larger involvement in the company's equity holding is crucial to forging an alliance with the selected commercial vehicle manufacturer from Japan.

PTL's Board of Directors has since decided to "positively pursue" Sumitomo's offer of purchase.

The transaction, if it happens, would take Sumitomo's total shareholding in SML to over 25 per cent.

Further, there is speculation that Sumitomo may also look to pick up Mazda's 15.6 per cent stake in SML.

The entire process, however, had been a subject of controversy with Sumitomo making clear its intention to increase its equity in SML, even as an open offer of private equity player Actis was on.

Actis currently has roughly 18 per cent stake in SML. Actis had, in a letter to financial institutions, conveyed that it is not in favour of dilution of PTL's equity in SML .

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