Eicher Motors LTD (EML) has said that the Indian promoters have bought out Mitsubishi Motors Corporation’s 3.18 percent stake in the company.

In an off-market transaction, Mitsubishi, which was one of the original promoters of the company, has sold its entire stake of 8,47,430 shares to the Indian promoters, following which the Indian promoters’ holding has gone up from 52.57 percent to 55.93 percent.

Eicher Goodearth Investments LTD (EIGL) had the right of first refusal in the event MMC wanted to sell its stake in EML. Exercising that right, these shares have been acquired by EML promoters.

Eicher Motors has declined to provide the exact amount of the stake sale. However, according to calculation based on Wednesday’s closing price of EML’s shares at the BSE, the stake sale is valued at around Rs 50.39 crore.

1982 Tie-Up

The Eicher group and Mitsubishi entered into a tie-up in 1982 for making light commercial vehicles (LCVs), which included Mitsubishi picking up a stake in Eicher Motors Ltd, the company in corporate to produce the LCVs. In 1986, Eicher Motors started making the Canter range of LCVs in technical and financial collaboration with Mitsubishi from its Pithampur plant.

VOLVO PLAY

According to industry sources, the agreement with Mitsubishi ended some time in 1994, after the technology transfer was completed. Since then, Mitsubishi has just been a shareholder in the company.

Its decision to sell its stake may have also been prompted by the tie-up of the Eicher group with Volvo, Called VE commercial Vehicles Ltd, to make Eicher trucks and buses, Volvo trucks, gears and shafts.

According to media reports, Mitsubishi is also believed to be in talks with French auto maker Peugeot-Citroen.