ADL considers a takeover after Optare refinancing agreement is announced
Ashok Leyland has increased its stake in Optare plc to 75.1% as part of a refinancing agreement.
Optare approved the deal conditional to the outcome of a vote at a shareholders meeting, which has been called for January 6, 2012.
The refinancing provides a guarantee to support Optare’s re-banking which will grant improved working capital facility for the business. At the same time, Ashok Leyland will increase its stake through a £4m placing of shares, raising new equity. The existing contractual and statutory employment rights and pension rights of all Optare employees will be safeguarded.
Optare CEO 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, chairman, said: “Given the global economic challenges we all face, this is a game changing deal for Optare. It ensures we can grow and prosper in an ever changing and demanding market place.”
Vinod Dasari, managing director of Ashok Leyland observed: “We see this as an important element in realising our vision of being among the top five bus manufacturers globally. We are confident 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.”
Since the announcement, Alexander Dennis Ltd (ADL) has been considering a cash offer for its rival firm after requesting information from Optare.
ADL said: “ADL has written to the chairman of Optare and has requested information on the business of Optare in order to assess whether or not ADL might be prepared to consider making an offer for the entire issued share capital of Optare.”
Full story in CBW1018, released January 11, 2012.