Sona Koyo buys 21% stake in European co

Sona Koyo, India's largest car steering system maker, on Friday announced the acquisition of 21 per cent stake in Fuji Autotech France for Euro 5 million to gain a toehold in Europe.

Besides, the company would also invest Rs 125 crore (Rs 1.25 billion) for expansion, Sona Koyo Steering Systems Chairman and Managing Director Surinder Kapur said.

The company, which is 7.85 per cent owned by Maruti and has a technical tie-up with Japan's Koyo Seiko, aims to supply auto components worth 10 million Euro to Fuji Autotech and use the European firm's marketing infrastructure to penetrate the customer base there.

Sixty per cent of the Rs 125 crore investment will come from borrowing while the rest from internal accruals.

"Sona's decison to participate in Fuji Autotech France is Sona's first step towards globalisation. I see an opportunity for Sona to become an engineering back office for Fuji Autotech France over a period of time," he said.