The Hindu Business Line : International Tractors may offload stake to Morgan Stanley

International Tractors Ltd (ITL), manufacturer of the Sonalika brand of tractors, is close to offloading about 5-6 per cent to Morgan Stanley, it is learnt. The company is also currently in talks to offload an additional 5-6 per cent to another private equity player, sources said.

The Sonalika Group Chairman, Mr L.D. Mittal, had in an interview last month said the company was looking to offload 10 per cent stake in ITL to private equity players, after which it will commence the necessary formalities for an initial public offering in March.

The Rs 1,000-crore tractor firm already has strategic investments by three firms, including two private equity firms, which collectively hold 32 per cent in ITL.

This includes a 10 per cent stake each by Citigroup and 3i, while Japanese tractor maker Yanmar has about 12 per cent stake in the company.

ITL expects to use the funds mobilised through these strategic stake sales and the IPO to set up a new plant as well as for its international operations. ITL has plans to set up an assembly unit in Africa. This will help boost exports to the region and 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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