Bahman Group Sells Majority Stake

Bahman Group Sells Majority Stake
Bahman Group Sells Majority Stake

Bahman Group, an Iranian private auto manufacturer, has announced the results of its second public tender offer by declaring that Visman Motor's consortium has joined the group as one if its largest shareholder.

Bahman Group is a private Iranian car manufacturer under license of Mazda and the private sector-owned Visman Motor is the distributor of Honda motorcycles in Iran.

Visman Motor is owned by Crouse Group, which is one of the largest local manufacturers of auto parts.

Based on a company press release, 62.2% of the shares of Bahman Group were sold for 1.6 trillion rials ($46 million) following its second public tender offer on June 7. The first public tender offering dates back to March.  

The shares were initially owned by three different companies namely Andishe Farda Fund (27%), Fan Pardazan Bahman (25%) and Hoor Energy Development and Investment Group (8.4%).

After the first public tender, Kosar Credit Institution had attempted to buy 100% of the shares offered.  However, it was announced that the institution was not authorized to conduct speculative activities and had to align its policies with those of the Central Bank of Iran. Therefore, it was decided to offer the shares purchased in a second public tender.

Visman has announced that by taking over Bahman Group, it intends to counter the effects of western-led sanctions and help the group thrive in line with the principles of Resistance Economy.

The Resistance Economy is a set of principles put forth by the Leader of Islamic Revolution Ayatollah Seyyed Ali Khamenei to boost domestic production and reduce dependence on petrodollars.

Bahman Group's CEO Reza Asem Nakhjavani corroborated the news, explaining that Visman Motor is part of a consortium of auto parts makers and other firms active in the auto sector.  

"The new leadership can turn things around for Bahman Group," he said.

  Privatization Beneficial

Experts suggest that Bahman Group's previous managerial setup was semi-governmental.  

Mohammad Hasheminejad, an official with Tehran Stock Exchange, added that ownership distribution is one of the most important factors defining the management of an economic/manufacturing entity.    

The shareholders' say in issues such as technical matters, financing, branding and public relations are all of utmost importance.

"The new purchase can help Iran win a larger share of the market in the Middle East," he said, adding that the transfer of knowhow is another benefit of the new deal.

The official added that foreign private firms, particularly those looking to expand operations in the country's manufacturing sector, prefer to do business with private Iranian firms.

Hasheminejad noted that the policies of the state sector are subject to change with every change in government and the instability is far from attractive to foreign investors.

"Due to the complicated regulations within the government, the sector is not very successful in international business negotiations," he said.

The new managerial structure will also help promote business ties between Bahman Group and Mazda.

The expansion of the company's relations will turn Iran into a regional export hub, which will benefit the country's manufacturing sector and boost economic growth.

Hasheminejad further said Visman Motor should lay out its future plans for the company as soon as possible, "as there still remain many areas that are opaque and need clarification".       

 Company Shares to Help Repay Debts

Some automotive pundits believe that the new development is bound to improve production quality and Bahman Group could become the country's third biggest automotive hub.        

Reportedly, Crouse auto parts manufacturing group had previously bought 16% of the shares in Iran Khodro Company and is seemingly pushing to buy 46% of the shares of SAIPA.

A month earlier, Minister of Industries, Mining and Trade Mohammad Reza Nematzadeh had announced that auto manufacturers must settle their debts and repay the money they owe to auto parts makers.

Some media reports speculated that automotive groups may settle their debts by selling company shares to auto parts makers.