Hero Group arranges funds to acquire Hero Honda stakesMarch 8th, 2011 - 5:11 pm ICT by IANS
New Delhi/Mumbai, March 8 (IANS) Indian conglomerate Hero Group Tuesday said it has arranged the required finance to acquire the 26 percent stake of Honda Motor of Japan in their joint-venture company Hero Honda Motors Limited (HHML).
In an regulatory filing, the company said that its investment company Hero Investments Private Limited (HIPL) is to acquire all of Honda’s 26 percent stake in HHML at Rs.739.97 per share.
The company has signed agreements with private equity firms BC India Private Investors II and Lathe Investment Private Limited for investing in HIPL to raise funds for the acquisition.
“Hero Group has also signed definitive agreements with PE firms BC India Private Investors II, an affiliate of Bain Capital LLC, and Lathe Investment Private Limited, a wholly owned subsidiary of the government of Singapore Investment Corporation (Ventures),” the company said.
Earlier, Foreign Investment Promotion Board (FIPB) had recommended the company’s application for investment by the PE firms to Cabinet Committee of Economic Affairs (CCEA). The company said that it was waiting for the necessary approval from CCEA.
In December 2010, Hero group and Honda Motor Co, the two promoter groups in the joint venture company established in 1984, had announced that they are restructuring their respective equity shares in HHML.
Currently, Hero Honda is the world’s largest manufacturer of two-wheelers, including Splendor, Passion, Karizma ZMR, Hunk, CBZ Xtreme mobikes and scooter Pleasure.
On Bombay Stock Exchange, the company’s scrip went down by 2.15 percent and stood at Rs.1,496.95.
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