Ashok Leyland has increased its holding in Optare from 26% to 75.1%. The refinancing is being achieved by Ashok Leyland providing a guarantee to support Optare’s re-banking which will provide substantially improved working capital for the business. Ashok Leyland will increase its stake to 75.1% of the company’s share capital through a placing of shares raising new equity.
The existing contractual and statutory employment rights and pension rights of all Optare employees will be safeguarded. The move follows Optare’s inability to secure re-banking as a stand-alone business and will see Ashok Leyland investing £4million and facilitating a £12million credit line.
Ashok Leyland first invested in Optare in July 2010. The announcement of its increased stake in the company comes as Optare confirms it has secured the contract to supply 190 Solo SRs to South Africa, a deal worth up to £18million. This comes shortly after Alexander Dennis (ADL) making an offer to purchase the company, only to be re-buffed by the shareholders. ADL who’s shareholders include the infamous Stagecoach MD Brian Souter, were forced to withdraw its offer after Opatre shareholders voted 99.9% in favour of the Ashok Leyland offer to increase their existing 26% shareholding to 75%.
Optare chief executive officer Jim Sumner said: ‘This is great news for Optare’s customers, employees and suppliers by securing stability and the long-term future of the business. The re-banking of Optare represents a critical milestone in the turnaround of the business and allows us to now complete the final phase of the three-year plan which commenced in June 2009. In addition, our recent move to a new factory in Sherburn gives us the capacity and modern assembly facilities necessary to capitalise on the additional sales our deeper partnership with Ashok Leyland will undoubtedly deliver.’
John Fickling, Optare chairman, added: ‘Given the global economic challenges we all face, this is a game-changing deal for Optare. It ensures that we can grow and prosper in an ever-changing and demanding market place”.
And Vinod Dasari, managing director of Ashok Leyland, notes: ‘We see this as an important element in realising our vision of being among the top five bus manufacturers globally. Through leveraging the synergies of the two companies, we are confident that going forward we will be able to accelerate technology sharing, develop future-ready products and increase our global footprint to fast-track our growth in volumes.’
So in name at least, The former company of C.H Roe is back once again in the hands of Leyland!