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Our Bureau

New Delhi , Oct. 10

INTERNATIONAL Tractors Ltd, manufacturers of the Sonalika brand of tractors, has offloaded 12 per cent equity to Japanese company Yanmar and is in talks to offload a further 10 per cent to a foreign private equity player.

Industry sources said Yanmar has picked up stake for approximately Rs 200 crore.

This development comes soon after Citigroup picked up a 10 per cent stake in International Tractors Ltd (ITL) for an undisclosed amount.

Under the agreement with Yanmar, ITL will manufacture components and 30-40 HP tractors initially for Yanmar and export them to Yanmar's operations in Eastern Europe, the US and Canada, apart from selling them in India. ITL will also make use of Yanmar's global distribution network to sell the Sonalika range of tractors.

ITL plans to use the funds to expand its capacity and is on the verge of finalising a location for its second plant, which will require an investment of Rs 150 crore. One of the locations being considered for the tractor plant is Aurangabad, sources said.

Further, ITL plans to set up an assembly unit in Africa. This will help boost exports to the region as well as reduce logistical costs. The company plans to ink a marketing tie-up with Tata International for the same and take advantage of the latter's distribution/service network in the region.

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