Hero Group To Offer Sale Of 29% Stake

By Suparna Chakaraborthy

Published: Monday, March 21, 2011, 16:14 [IST]

The break away of the JV between Honda Motors and Hero Group from Hero Honda has entitled the latter to acquire 26% stake from the Japanese company. And now Hero Group is coming out with the sale of its 29% stake from Hero Investment Pvt. Ltd for the amount of Rs3650 crore. The sale of 29% stake from the Hero group comes after the group inked an agreement with its capital funders BC India Pvt Investors II of Bain Capital LLC and Lathe Investment Pvt Ltd of the Singapore Government (Singapore Investment Corpn).

The company"s official report on Hero 20% stake sale said the two investors shall collectively invest Rs3650 crore after ascertaining the necessary compliances. The recommendations set forth by the government on foreign investment has to be duly approved by the Cabinet Committee.

The amount will account for Hero 29% stake from HIPL which therein after possess 43.33% share from Hero Honda Motors Ltd after the acquisition. Currently HIPL is one among the strong holders of the company"s shares with 17.33% as of December 2010. Hero Group of Munjals is to pay Rs3841.83 crore for securing 26% share from the outgoing Honda Motors. The amount derived through the Hero 20% stake of HIPL will be utilized for clearing the debts which may availed for settling to Honda. The partners in Hero Honda JV are departing breaking the 26 year old venture which fed the market with the bikes like Splendor, Passion, ZMR, Karizman, Hunk, CBZ Xtreme and Pleasure scooter.

Article Published On: Monday, March 21, 2011, 15:39 [IST]

Read more on: #automobile #hero honda #two wheeler

More from DriveSpark