Posted by:  totalview on ( 24-Jul-08 16:22 ) | | | Price : BSE: Rs 276.80 ( 5.57 % ), NSE: Rs. 276.70 ( 6.16 % ) | FINALLY, today Cabinet Committee on Economic Affairs(CCEA)has approved U.S.$ 275 MILLION investment by Volvo in the JV with Eicher Motors. Here is the PIB release by Govt. of IndiaProposal of M/s. Aktiebolaget Volvo (publ), Sweden to invest 45.6% in the paid up equity share capital of M/s. Eicher Motors India Ltd.
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15:3 IST
The Cabinet committee on Economic Affairs today gave its approval to M/s. Aktiebolaget Volvo (publ), Sweden to invest 45.6% (45,60,000 equity shares) in the paid up equity share capital in a new joint venture company, Eicher Motors India Limited (EMIL) incorporated by Eicher Motors Limited (Eicher) on 7.3.2008 for carrying on the commercial vehicle business (along with related components and design services business), which is to be transferred by Eicher to EMIL and demerger of sales and distribution network of Volve India Pvt. Ltd. (Volvo India) in to EMIL. Eicher shall be holding the balalnce 54.4% equity of the company and shall act as an operating-cum-holding company. The cash investment by M/s. Aktiebolaget Volvo (Publ), Sweden together with its subsidiaries/affiliates will amount to US$ 275 million.
The approval will be subject to the following conditions:
(i) Compliance with the RBI/SEBI guidelines;
(ii) Compliance with the provisions of Press Note 1 (2005 series) and Press Note 9 (1999 series) and
(iii) Approval of the relevant High Courts for the demerger of distribution business of Volve India.
As a result, FDI amounting to US $ 275 million will be received in the country.
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