The Hindu Business Line : ITL to sell over 40% stake to three players

INTERNATIONAL Tractors Ltd (ITL), manufacturer of the Sonalika brand of tractors, is planning to offload upwards of 40 per cent stake to three players as it seeks to expand its operations both domestically and overseas. ITL is estimated to have an annual turnover of about Rs 1,000 crore.

Citigroup has already picked up 10 per cent stake in ITL, and another private equity investor is set to pick up an additional 10-15 per cent. Further, a Japanese tractor manufacturer is also set to pick up substantial stake in the firm. Sources pointed out that the Japanese company is most likely the Yanmar Group, though there was no official confirmation of the same.

The Japanese player will not only be ITL's financial partner but also a technical partner with plans to source components and engines from ITL. The company would fill the slot vacated by Renault, which had earlier this year sold its 20 per cent stake in ITL.

Industry officials point out that ITL plans to use the funds generated from this transaction to set up a second tractor manufacturing facility in the country. According to sources, the new unit is likely to be located in Maharashtra. ITL's current unit is located in Hosiarpur, Punjab.

Further, ITL is planning to set up an assembly unit in Africa. This would help to boost exports to the region as well as to reduce logistical costs. ITL plans to ink a marketing tie-up with Tata International for the same and take advantage of the latter's distribution/service network in the region.

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