Auto major Tata Motors said it has sold 20% stake in Telcon, its construction equipment joint venture with Japan’s Hitachi, to its partner for Rs 1,159 crore (Rs 11.59 billion).
After the deal, Tata Motors will hold 40% stake in Telcon, while Hitachi will hold 60%, the company said.
Standard Chartered and ABZ partners were the financial and legal advisers for the transaction, it said further.
Telcon is one of the top providers of mining, infrastructure, construction and agricultural equipment and services. It was established in 1999 as a fully-owned associate of Tata Motors and in 2000, Hitachi was brought in as a joint venture partner by selling 20% stake, which was later on hiked by another 20%.
The stake sale by Tata Motors in Telcon is part of its tactic to sell stakes in its group companies to generate funds to clear debt.
Last month, Tata Motors vice-chairman Ravi Kant had said that the company was considering different alternatives for selling the stake’ amid reports of State Bank of India planning to buy up to 30% in Tata Motors Finance.
Tata Motors chief financial officer C Ramakrishnan had said the company was thinking about lowering debts of around Rs 20,000 crore (Rs 200 billion) and was looking at numerous fund-raising alternatives.