Aggreko arm to buy Cummins rental biz

Pune: Cummins India, manufacturer of diesel and natural gas engines for power generation, industrial and automotive markets, has entered into an agreement to sell its rental business to the Indian subsidiary of Aggreko Plc for Rs 29.1 crore plus applicable duties subject to shareholder approval.

Aggreko Plc, player in the rental of power, temperature control and oil-free compressed air systems, serves customers in over 100 countries. In 2007, Aggreko had revenues of approximately £700 million.

Mr Anant Talaulicar, Chairman and Managing Director, Cummins India Ltd, said: “The sale of our rental business aligns with our long-term business strategy. This will enable greater focus on our core business. Aggreko will be a potential customer for generators, engines, and alternators manufactured by Cummins in India. We look forward to partnering with them as they grow their business in India.”

Cummins India entered into the genset rental business in 2000 to provide rental services to its customers. The reported annual revenue for 2007 was Rs 21.99 crore.

Mr Rupert Soames, Chief Executive of Aggreko said, “We are delighted to be creating a foundation for our operations in India, which has been a strategic objective of Aggreko for some time. We will be investing significant amounts in new rental fleet and facilities over the coming years and believe Aggreko has the potential to be a market leader in temporary power in India.”

The rental business is currently a part of the Power Generation Business Unit of Cummins India Ltd. Elaborating on the deal, Mr Beau Lintereur, Vice-President, Power Generation Business Unit, said, “There will be a hand-holding period, wherein Cummins will support Aggreko in transitioning the business. The existing contracts and arrangements will be novated in favour of Aggreko.”

He further added, “Employees currently working with Cummins’ Rental Business would either be offered positions within Aggreko or have the option to continue with Cummins India Ltd.”