Voltas terminates JV agreement with Highly International

Voltas Limited has terminated the pact with Highly International, a leading supplier of suppliers of AC Compressor,  as it could not get necessary approvals from the government. The proposed JV of the Tata Group firm with Highly International was subject to clearance from the government under Press Note No 3(PN3). Highly is a Chinese company.

As per the regulatory update from Voltas, “As the regulatory approvals were not forthcoming, both the parties have mutually decided to terminate the Joint Venture Agreement.” 

Under press note 3 of government, it has made mandatory for companies to have prior approval for foreign investments from countries that share a land border with India in order to curb opportunistic takeovers of domestic firms following the COVID-19 pandemic.

Voltas is one of the leading players in the compressor-based cooling market. It was trying to reduce dependency on the import of important components such as compressors by setting up a JV here. In May last year, Voltas said it had executed the joint venture with Highly International (Hong Kong) Limited to engage in the business of design, development, manufacture, marketing, sale and service of inverter compressors for room ACs, motors for inverter compressors and their associated parts.

In the JV, Highly held around 60% of the shareholding while rest was owned by Voltas.