According to a memorandum of understanding (MoU) signed here between the two companies, the Indian company is not known at the moment as evaluation of ITL assets is currently going on, chairman and managing director, Renault Agriculture, B Morange told newsmen here today.

As per the agreement, Renault could acquire up to 27 per cent stake of the company but the management of the company would be controlled by the Indian company. Renault would appoint one member on the ITL board, ITL chairman, L D Mittal said.

ITL, manufacturer of Sonalika brand tractors in the country, would manufacture Renault tractors having capacities between 55 horse power (HP) and 85 HP at its Hoshiarpur plant and market in India and neighbouring countries alongside its own tractors.

ITL, which plans to double itsproduction capacity from 1,500 units per month, is currently producing tractors in the range of 40-60 HP categories. This agreement would help the company in having a complete range of products, especially the higher HP segment, which is growing quite nicely in India, Mittal said.

Both the companies would jointly participate in the international marketing strategies. Two separate joint marketing companies will be set up under Renault's management, one for European market and another for rest of the world except India and South Asia.

International tractors achieved a growth rate of 124 per cent in 1998-99 as it sold 6,211 units in the just ended fiscal as compared to 2,600 units sold in the previous year.

The Renault group also manufactures cars and trucks. Recently it took a stake of 37.5 per cent and thereby the management control in the Nissan group of Japan.