Telco to buy 50% Jardine stock in Concorde
By Pradeep Rane | 17 Sep 2002
Mumbai: Tata Engineering and Locomotive Company (Telco) has reached an agreement with Jardine Motors to acquire its 50-per cent stake in Concorde Motors Ltd (CML). CML is currently a joint venture between the Tata group and Jardine Motors, in which each of the partners holds 50 per cent of the equity and represents Telcos passenger vehicles.
Telco has a 25-per cent stake, Tata Industries 15 per cent and Tata Finance 10 per cent in Concordes Rs 125-crore equity. The rest is with Jardine Motors, a wholly-owned subsidiary of Jardine Matheson. Certain internal and external approvals have to be sought as Jardine would require government approval before it could exit from the company.
Company officials maintain that Concorde will retain all the 450 employees even after the acquisition. The nature of the business will continue to be the sales and service of Telco passenger vehicles. Concorde Motors is accumulating huge losses in the northern and western markets. Its franchisees are in trouble and this is the reason for Jardines exit from the joint venture.
Concorde started with seven Telco and two Mercedes franchisees across eight cities. With the Mumbai franchisee shutting down, Concorde had no Mercedes dealership and only three Telco dealerships. The slowdown in the automobile sector forced the company to go slow on its property expansion plans. The company shelved a plan to set up a Rs 3-crore, 100-bay workshop for both Telco and Mercedes Benz at Goregaon, a Mumbai borough.
Telco had posted a net profit of Rs 280.30 million for the quarter ended 30 June 2002 as compared to a net loss of Rs 989 million for the quarter ended 30 June 2001. The total income (net of excise) increased from Rs 14,289.70 million in JQ-2001 to Rs 17,546.70 million in the quarter ended 30 June 2002.
The Indica ended the first quarter with a total sale of 11,905 numbers with volumes being affected due to a planned closure of the Tata Sedan switchover and power crisis at the plant in Pune in the last week of May. But in June 2002, Indica re-emerged as the segment leader, with a sale of 7,056 numbers, the position it consistently occupied during most part of the previous year