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Escorts to exit motorcycle, auto part JVs

Indian tractor maker Escorts Ltd plans to boost investment in some of its newer service businesses and sell off stakes in some of its older manufacturing operations such as two-wheelers, a company official said.

The Escorts group, a leading business house owned by the Delhi-based Nanda family, has interests spanning agri-machinery, auto parts, telecoms, software, health and financial services.

Escorts plans to exit from its two-wheeler joint venture with Japan's Yamaha Motor and from its auto parts company with Germany's Mahle GmbH, Sriram Khattar, head of strategic planning at Escorts said on Tuesday.

Escorts Ltd, the group's flagship, also wants to sell its stake in its venture with earthmoving equipment-maker JC Bramford Excavators of Britain but would wait for a good price, he added.

At the same time, the Escorts group hopes to extend its mobile phone services to four new states and spend 1.95 billion rupees over the next two years in expanding healthcare services, he added.

Khattar's comments followed a report in an economic daily on Tuesday which quoted Escorts' chairman Rajan Nanda as saying the group would only focus on such businesses which it could independently take forward and become a dominant player.

NEGOTIATING PRICE

Khattar said the Escorts hoped to complete negotiations with Yamaha on a price for selling its stake in the next few weeks.

Escorts Ltd holds a 26 per cent stake in Yamaha Motor Escorts Ltd. Its market share has fallen due to delays in introducing fuel-efficient four-stroke technology.

The timing for the stake sale in Mahle was uncertain, Khattar said. Escorts' 50:50 joint venture with Mahle is India's largest maker of piston assemblies while Escorts JCB Ltd, in which Escorts owns a 40 per cent stake, has the largest share in some of India's earth-moving and excavator market segments.

Khattar said Escotel Mobile Communications Ltd planned to acquire existing mobile phone companies in two states and bid for licences to become a fourth operator in two other states. It already offers mobile services in the southern state of Kerala as well as in Uttar Pradesh West and Haryana in northern India.

Escorts holds a 51 per cent stake in Escotel Mobile while Hong Kong's First Pacific Company Ltd holds the rest.

In the health services segment, Escorts Heart Institute and Research Centre Ltd runs a heart hospital in New Delhi while Escorts Hospital and Research Centre Ltd operates a hospital in Faridabad on the outskirts of Delhi. The group plans to expand such healthcare services to other north Indian cities.

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