Texmaco Rail & Engineering Limited has executed a Memorandum of Understanding (MOU) with Bochumer Verein Verkehrstechnik GmbH, Germany (BVV) to explore potential collaboration in the field of railway wheels, wheelsets, axles and related rail vehicle components.

Key Terms and Purpose

The MOU records broad terms for exploring and pursuing potential collaboration between Texmaco and BVV, including:

  • Evaluation of opportunities and technical, qualification, certification, and localisation requirements prescribed by Indian Railways
  • Supply of Products to the global railway industry, including Indian Railways
  • Provision of associated technical services and solutions through a proposed joint venture entity and/or special purpose vehicle in India
  • Contemplation of a supply arrangement where BVV would supply Products to Texmaco

Agreement Details

  • Size: No immediate fixed commercial consideration prescribed
  • Shareholding: Texmaco does not hold any shareholding in BVV
  • Relationship: BVV is not related to the promoter, promoter group or group companies of Texmaco
  • Transaction Type: Does not constitute a related party transaction

Significant Terms

  • Technical support from BVV for product design, engineering, and manufacturing processes
  • Texmaco expected to undertake/support localisation, industrialisation, manufacturing, assembly, testing, quality assurance, marketing, supply and after-sales support in India
  • BVV proposed to be one of Texmaco's preferred international suppliers with minimum purchase commitments
  • Parties have agreed to negotiate and execute definitive agreements in good faith
  • MOU effective for 12 months from execution unless terminated earlier
  • Contains exclusivity provisions during its term in relation to the contemplated purpose

Future Considerations

  • Shareholding distribution between Texmaco and BVV in the proposed JV entity remains subject to further negotiation
  • Governance and board nomination rights in the proposed JV Entity to be agreed under Joint Venture Agreement
  • Establishment and operation of proposed JV Entity subject to execution of definitive agreements and applicable corporate and regulatory approvals
  • Detailed commercial terms including shareholding structure, funding, minimum purchase commitments, pricing, and supply capacity to be documented in definitive agreements