Volvo mints rich dividends from Eicher stake sale

Swedish automobile major AB Volvo has divested nearly half of its stake at Eicher Motors Ltd (EML). It had acquired an 8.4 percent stake in Eicher Motors in May 2008, in addition to signing a joint venture with the Indian company.

Volvo divested 12.7 lakh shares, or approximately 4.7 percent of EML's equity capital on March 4. It is reported that Volvo earned over Rs 1,900 crore from the stake sale.

In a press statement, an Eicher spokesperson said that Volvo's stake sale will have 'no bearing whatsoever' on the Volvo-Eicher (VE Commercial Vehicles) joint venture. "The shareholding pattern and governance framework of VECV remains unchanged. Both partners – Eicher Motors Ltd and AB Volvo – are equally committed to grow the business together," the spokesperson said in the statement.

Since its inception, VECV has invested in modernising the Eicher range of trucks and buses, commissioned a medium duty engine manufacturing plant which also exports base Euro 6 engines to Volvo in Europe and has set up a bus body manufacturing plant too.