CHENNAI, December 20, 2011: Ashok Leyland, the Hinduja Group flagship in India, together with its associate companies, will increase its stake in the British bus maker, Optare plc, to 75.1% (subject to approval by the shareholders of Optare plc) thanks to a re-financing agreement announced today. The Company had initially acquired 26% stake in Optare in July 2010 as part of a long-term strategic partnership. This move fully integrates Optare into Ashok Leyland's global strategy for buses.

The re-financing has been achieved by Ashok Leyland facilitating a credit-line to support Optare's re-banking options and providing a substantially improved working capital facility for the business. Alongside, Ashok Leyland will reach 75.1% of the company's share capital through placing of shares raising new equity.

Executive comments:

Dheeraj G. Hinduja, Chairman, Ashok Leyland: "We are confident that, together, we can surge ahead with Optare taking advantage of the large opportunities for growth and development we see based on synergy and integration with Ashok Leyland's bus business."

Vinod Dasari, Managing Director, Ashok Leyland: "We see this as an important element in realizing our vision of being among the top 5 bus manufacturers globally. Through  leveraging the synergies of the two companies, we are confident that going forward we will be able to accelerate technology sharing, develop future-ready products and substantially and quickly increase our global footprint."

Jim Sumner, Chief Executive Officer, Optare: "This is great news for Optare's customers, employees and suppliers and secures stability and the long-term future of the business. The re-banking represents a defining moment in the company's 3-year turnaround plan which commenced in June 2009."

"In addition, our recent move to a new factory in Sherburn gives us the capacity and modern assembly facilities necessary to fully capitalise on the additional sales and joint product development opportunities which our deeper partnership with Ashok Leyland will undoubtedly deliver," he also said.

John Fickling, Chairman, Optare: "Given the global economic challenges we all face, this is a game changing deal for Optare. It ensures that Optare can grow and prosper given the challenging dynamics in an ever-changing market place."